Income Taxes

The consolidated effective tax rate was 32.8%, 36.2% and 37.1% for fiscal 2017, 2016 and 2015, respectively, and reflects income tax expense for our U.S. and international operations at their respective statutory rates.

The provision for income taxes consists of the following:



	Year Ended July 31,
	2017					2016					2015
	Current		Deferred			Current		Deferred			Current		Deferred
United States:
Federal	$	28,900	$	2,020		$	29,392	$	(216	)	$	24,602	$	(425	)
State	4,352		261			4,433		(153		)	3,920		(218		)
International	1,545		(2,223		)	1,863		(1,341		)	1,165		(806		)
Total	$	34,797	$	58		$	35,688	$	(1,710	)	$	29,687	$	(1,449	)

The geographic components of income before income taxes are as follows:



	Year Ended July 31,
	2017			2016		2015
United States	$	108,329		$	92,744	$	73,645
International	(2,096		)	1,187		2,546
Total	$	106,233		$	93,931	$	76,191

The consolidated effective income tax rate differed from the U.S. statutory tax rate of 35.0% in fiscal 2017, 2016 and 2015 due to the following:



	Year Ended July 31,
	2017		2016		2015
Expected statutory tax	35.0	%	35.0	%	35.0	%
Differential attributable to:
Foreign operations	—	%	0.6	%	1.2	%
State and local taxes	3.9	%	3.2	%	3.4	%
Domestic production deduction	(2.7	)%	(2.3	)%	(2.4	)%
Acquisition related items, net	0.1	%	—	%	(1.6	)%
Loss on sale of business	—	%	—	%	1.1	%
R&E tax credit	(1.4	)%	(1.1	)%	(0.5	)%
Change in foreign tax rates	—	%	(0.4	)%	—	%
Excess tax benefits	(2.2	)%	—	%	—	%
Other	0.1	%	1.2	%	0.9	%
Consolidated effective tax rate	32.8	%	36.2	%	37.1	%

As a result of the adoption of ASU 2016-09 on August 1, 2016, we no longer record excess tax benefits as an adjustment to additional paid-in-capital, but record such excess tax benefits on a prospective basis as a reduction of income tax expense, which amounted to $2,241 for fiscal 2017.

Deferred income tax assets and liabilities are comprised of the following:



	July 31,
	2017			2016
Deferred tax assets:
Accrued expenses	$	6,308		$	5,140
Inventories	4,655			2,990
Accounts receivable	729			793
Other long-term liabilities	180			252
Stock-based compensation	3,402			3,665
Capital investment	545			546
Foreign NOLs	6,490			5,154
Subtotal	22,309			18,540
Valuation allowance	(2,984		)	(2,334		)
	19,325			16,206
Deferred tax liabilities:
Property and equipment	(9,957		)	(8,089		)
Intangible assets	(20,107		)	(19,818		)
Goodwill	(13,975		)	(11,878		)
	(44,039		)	(39,785		)
Net deferred tax liabilities - noncurrent	$	(24,714	)	$	(23,579	)

For foreign tax reporting purposes, our Net Operating Losses (“NOLs”) at July 31, 2017 are $6,490 and originated primarily from foreign acquisitions. Most of these NOLs do not expire and are fully available for utilization against future profits in certain non-U.S. tax jurisdictions. However, we have recorded a valuation allowance of $2,984 for these foreign NOLs, which are primarily associated with certain early-stage foreign operations as well as the exit of the Jet Prep business more fully described in Note 8, "Intangibles and Goodwill." We believe it is more likely than not that we will be unable to utilize these NOLs.

During fiscal 2017 and 2016, no dividends were repatriated from our foreign subsidiaries. All of the undistributed earnings of our foreign subsidiaries are considered to be indefinitely reinvested at July 31, 2017. Accordingly, deferred taxes are not provided on undistributed earnings of foreign subsidiaries that are indefinitely reinvested. At July 31, 2017, the cumulative amount of such undistributed earnings indefinitely reinvested outside the United States was approximately $44,509. Determining the tax liability that would arise if these earnings were remitted is not practical.

We record liabilities for an unrecognized tax benefit when a tax benefit for an uncertain tax position is taken or expected to be taken on a tax return, but is not recognized in our consolidated financial statements because it does not meet the more-likely-than-not recognition threshold that the uncertain tax position would be sustained upon examination by the applicable taxing authority. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon settlement with the tax authorities. Any adjustments upon resolution of income tax uncertainties are recognized in our results of operations. Our policy is to record potential interest and penalties related to income tax positions in interest expense and general and administrative expense, respectively, in our consolidated financial statements. However, such amounts have been relatively insignificant due to the nominal amount of our unrecognized tax benefits relating to uncertain tax positions.

The Company concluded an audit by the Internal Revenue Service (“IRS”) for fiscal years 2015, 2013 and 2012. With respect to state or foreign income tax examinations, the Company is generally no longer subject to examinations for fiscal years ended prior to July 31, 2009.