6. Income Taxes

On December 22, 2017, the Tax Reform Act was enacted which significantly revised the U.S. corporate income tax system. The Tax Reform Act, among other things, reduced the corporate federal income tax rate to 21% from 35%, changed bonus depreciation regulations and limited deductions for executive compensation. The income tax rate reduction in the Tax Reform Act was effective January 1, 2018 which resulted in a blended federal statutory tax rate of 29.2% in fiscal 2018.

In fiscal 2018, we re-measured our deferred tax assets and liabilities based on the tax rate at which they are expected to reverse in the future, which was either at a federal rate of 29.2% for reversals expected in fiscal 2018 or 21% for reversals in fiscal 2019 and subsequent years. During fiscal 2018, we recognized an income tax benefit of $14.1 million for the re- measurement impact from applying the provisions of the Tax Reform Act.

The provision for income tax on income from continuing operations includes the following components:


	For the Year Ended
	May 31,
	2019		2018		2017
Current:
Federal	$	4.8	$	14.6	$	9.3
State		0.1		0.1		0.2
Foreign		5.0		1.7		3.1
		9.9		16.4		12.6
Deferred		(5.0)		(12.9)		12.5
	$	4.9	$	3.5	$	25.1

The provision for income taxes on pre‑tax income differs from the amount computed by applying the U.S. federal statutory income tax rate of 21.0% for fiscal 2019, 29.2% for fiscal 2018 and 35.0% for fiscal 2017 to income from continuing operations before provision for income taxes due to the following:


	For the Year Ended
	May 31,
	2019		2018		2017
Provision for income tax at the federal statutory rate	$	18.7	$	22.5	$	27.0
Deferred tax re-measurement from the Tax Reform Act		—		(14.1)		—
Excess tax benefits from stock-based compensation		(2.7)		(2.9)		—
State net operating losses		(0.3)		1.3		5.7
Change in valuation allowance for state deferred tax assets		(6.9)		(3.4)		(5.7)
Effective settlement of prior tax positions		(4.7)		—		(2.2)
Other		0.8		0.1		0.3
Provision for income tax	$	4.9	$	3.5	$	25.1

Income before provision for income taxes includes the following components:


	For the Year Ended
	May 31,
	2019		2018		2017
Domestic	$	68.9	$	58.7	$	57.7
Foreign		20.1		18.5		19.4
	$	89.0	$	77.2	$	77.1

Deferred tax liabilities and assets result primarily from the differences in the timing of the recognition of transactions for financial reporting and income tax purposes. Our deferred tax liabilities and assets consist of the following components:


	May 31,
	2019		2018
Deferred tax assets:
Employee benefits	$	9.4	$	9.7
State net operating losses		9.0		8.6
Deferred revenue		7.7		1.1
Inventory costs		4.9		15.9
Postretirement benefits		3.7		2.2
Other		4.8		4.2
Total deferred tax assets		39.5		41.7
Valuation allowance		(0.1)		(7.0)
Total deferred tax assets net of valuation allowance		39.4		34.7
Deferred tax liabilities:
Tangible and intangible assets		(36.1)		(50.2)
Other		(0.2)		(0.2)
Total deferred tax liabilities		(36.3)		(50.4)
Net deferred tax assets (liabilities)	$	3.1	$	(15.7)

As of May 31, 2019, we have determined that the realization of our deferred tax assets is more likely than not and that a valuation allowance is not required except for certain state deferred tax assets, including net operating losses. The change in the valuation allowance was primarily the result of the expected utilization of a portion of these state net operating losses. Our net operating losses have carry forward periods that range from 5 to 20 years. Our history of operating earnings, our expectations for continued future earnings, the nature of certain of our deferred tax assets and the scheduled reversal of deferred tax liabilities, primarily related to depreciation, support the recoverability of the majority of the deferred tax assets. Our net deferred tax assets are included in Other non-current assets on our Consolidated Balance Sheet at May 31, 2019.

Income tax receivable was $1.1 million and $1.0 million at May 31, 2019 and 2018, respectively, and was included in Other current assets on the Consolidated Balance Sheet.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits was as follows:


	For the Year Ended
	May 31,
	2019		2018		2017
Balance, beginning of year	$	4.4	$	4.4	$	12.9
Additions for tax positions of prior years		—		—		0.4
Effective settlement of prior tax position		(4.4)		—		(8.9)
Balance, end of year	$	—	$	4.4	$	4.4

The reserve for unrecognized tax benefits decreased primarily as a result of effective settlement of tax positions for prior tax years, which occurred upon the settlement of IRS examinations. Income tax expense in fiscal 2019 included a benefit of $4.4 million for these effective settlements. Income tax expense in fiscal 2017 included a benefit of $2.2 million and discontinued operations included a benefit of $6.7 million for these effective settlements.

Fiscal years 2016 and subsequent are open for examination. Various states and foreign jurisdictions also remain open subject to their applicable statute of limitations.