Income Taxes

12 Months Ended

Jun. 01, 2019

Income tax expense (benefit) consisted of the following:



	Fiscal year ended
	June 1, 2019		June 2, 2018			June 3, 2017
Current:
Federal	$	8,160	$	18,560		$	(48,030	)
State	1,460		6,390			(6,670		)
	9,620		24,950			(54,700		)
Deferred:
Federal	4,843		11,038			13,076
Enacted rate change	—		(42,973		)	—
State	1,280		(1,874		)	1,757
	6,123		(33,809		)	14,833
	$	15,743	$	(8,859	)	$	(39,867	)

Significant components of the Company’s deferred tax liabilities and assets were as follows:



	June 1, 2019		June 2, 2018
Deferred tax liabilities:
Property, plant and equipment	$	49,275	$	47,899
Inventories	27,750		25,494
Investment in affiliates	7,609		7,996
Other comprehensive income	324		—
Other	2,596		1,616
Total deferred tax liabilities	87,554		83,005

Deferred tax assets:
Accrued expenses	2,170		3,013
State operating loss carryforwards	133		566
Other comprehensive loss	—		95
Other	2,654		3,276
Total deferred tax assets	4,957		6,950
Net deferred tax liabilities	$	82,597	$	76,055

The differences between income tax expense (benefit) at the Company’s effective income tax rate and income tax expense at the statutory federal income tax rate were as follows:

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	Fiscal year end
	June 1, 2019			June 2, 2018			June 3, 2017

Statutory federal income tax (benefit)	$	14,694		$	34,105		$	(39,950	)
State income tax (benefit)	2,164			3,200			(3,193		)
Domestic manufacturers deduction	—			(2,545		)	4,095
Enacted rate change	—			(42,973		)	—
Tax exempt interest income	(197		)	(101		)	(206		)
Other, net	(918		)	(545		)	(613		)
	$	15,743		$	(8,859	)	$	(39,867	)

In December 2017, the President of the United States signed into law the Tax Cuts and Jobs Act of 2017 (the “Act”), which among other matters reduced the United States corporate tax rate from 35% to 21% effective January 1, 2018. In fiscal 2018, the Company recorded a $43 million tax benefit primarily related to the remeasurement of certain deferred tax assets and liabilities.

Federal and state income taxes of $36.5 million, $2.1 million, and $3.7 million were paid in fiscal years 2019, 2018, and 2017, respectively. Federal and state income taxes of $418,000, $47.2 million, and $17.6 million were refunded in fiscal years 2019, 2018, and 2017, respectively.

The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company measures the tax benefits recognized based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. As of June 1, 2019, there were no uncertain tax positions that resulted in any adjustment to the Company’s provision for income taxes.

We are under audit by the IRS for the fiscal years 2013 through 2015. We are subject to income tax in many jurisdictions within the U.S., and certain jurisdictions are under audit by state and local tax authorities. The resolutions of these audits are not expected to be material to our consolidated financial statements. Tax periods for all years beginning with fiscal year 2013 remain open to examination by federal and state taxing jurisdictions to which we are subject.