Income Taxes

The provision (benefit) for income taxes for the years ended December 31, 2015, 2014 and 2013, consisted of the following (in thousands):



	Years Ended December 31,
	2015			2014			2013
Current:
Federal	$	181,640		$	146,633		$	114,687
State	36,281			33,054			27,358
Foreign	13,892			15,377			16,598
Deferred:
Federal and state	(8,398		)	(4,626		)	(7,759		)
Foreign	(181		)	983			(5,500		)
	$	223,234		$	191,421		$	145,384

Income before the provision for income taxes for the years ended December 31, 2015, 2014 and 2013, consisted of the following (in thousands):



	Years Ended December 31,
	2015		2014		2013
Domestic	$	520,263	$	449,834	$	357,382
Foreign	60,767		47,515		40,197
	$	581,030	$	497,349	$	397,579

The income taxes shown above varied from the statutory federal income tax rates for these periods as follows:



	Years Ended December 31,
	2015		2014		2013
Federal U.S. income tax rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal tax benefit	4.2		4.2		4.3
Non-deductible expenses	0.5		0.6		0.7
Non-U.S. income taxed at different rates, net of foreign tax credits	0.1		(0.2	)	(1.0	)
Federal tax credits	(0.6	)	(0.6	)	(1.3	)
Tax impact of uncertain tax positions	(0.2	)	(0.1	)	0.1
Valuation allowance release, net	(0.5	)	(0.3	)	(1.0	)
Other, net	(0.1	)	(0.1	)	(0.2	)
Effective tax rate	38.4	%	38.5	%	36.6	%

The deferred portion of the tax provision (benefit) consisted of the following (in thousands):



	Years Ended December 31,
	2015			2014			2013
Amortization of franchise rights	$	514		$	514		$	514
Amortization of other intangibles	1,590			1,241			621
Accrued expenses, deducted for tax when paid	(17,664		)	(14,221		)	(11,190		)
Capitalized costs for books, deducted for tax	5,315			8,809			3,019
Depreciation	(5,932		)	(4,147		)	(2,597		)
Federal impact of unrecognized tax benefits	1,058			44			(274		)
Foreign tax credit carryforwards	3,636			(186		)	(3,449		)
Other, net	2,904			4,303			97
	$	(8,579	)	$	(3,643	)	$	(13,259	)

The deferred income tax amounts included on the Consolidated Statements of Financial Position are composed of the following (in thousands):



	December 31,
	2015			2014
Current deferred income tax assets, net	$	145,684		$	133,151
Long-term deferred income tax liabilities, net	(29,139		)	(26,807		)
	$	116,545		$	106,344

The components of the deferred income tax amounts at December 31, 2015 and 2014, were as follows (in thousands):



	December 31,
	2015			2014
Deferred Income Tax Assets
Provision for bad debts	$	11,092		$	9,210
Deferred compensation and other benefit obligations	96,948			83,065
Workers’ compensation	8,206			9,138
Stock-based compensation	15,814			14,572
Credits and net operating loss carryforwards	35,499			39,309
Other	23,885			25,316
Total deferred income tax assets	191,444			180,610
Deferred Income Tax Liabilities
Amortization of intangible assets	(26,960		)	(25,060		)
Property and equipment basis differences	(11,890		)	(12,384		)
Other	(9,720		)	(7,261		)
Total deferred income tax liabilities	(48,570		)	(44,705		)
Valuation allowance	(26,329		)	(29,561		)
Total deferred income tax assets, net	$	116,545		$	106,344

Credits and net operating loss carryforwards primarily include net operating losses in foreign countries of $27.9 million that expire in 2016 and later; and California enterprise zone tax credits of $4.3 million that expire in 2023. Valuation allowances of $24.5 million and $1.8 million have been established for net operating losses carryforwards in foreign countries and California enterprise zone tax credits, respectively.

The Company has not provided deferred income taxes or foreign withholding taxes on $5.7 million and $3.7 million of undistributed earnings of its non-U.S. subsidiaries as of December 31, 2015 and 2014, respectively, since the Company intends to reinvest these earnings indefinitely. The U.S. tax impact upon repatriation, net of foreign tax credits, would be zero for the years ended December 31, 2015 and 2014.

FASB authoritative guidance prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The literature also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

The following table reconciles the total amounts of gross unrecognized tax benefits from January 1, 2013 to December 31, 2015 (in thousands):



	December 31,
	2015			2014			2013
Balance at beginning of period	$	4,573		$	6,110		$	7,097
Gross increases—tax positions in prior years	—			1			559
Gross decreases—tax positions in prior years	(1,807		)	(333		)	(369		)
Gross increases—tax positions in current year	120			35			38
Settlements	(520		)	—			—
Lapse of statute of limitations	(1,552		)	(1,240		)	(1,215		)
Balance at end of period	$	814		$	4,573		$	6,110

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $0.5 million, $0.9 million and $1.3 million for 2015, 2014 and 2013, respectively.

The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. The total amount of interest and penalties accrued as of December 31, 2015, is $0.2 million, including a $2.3 million reduction recorded in income tax expense during the year. The total amount of interest and penalties accrued as of December 31, 2014 is $2.5 million, including a $0.3 million reduction recorded in income tax expense during the year. The total amount of interest and penalties accrued as of December 31, 2013, was $2.8 million, including a $0.3 million reduction recorded in income tax expense during the year.

The Company believes it is reasonably possible that the settlement of certain tax uncertainties could occur within the next twelve months; accordingly, $0.3 million of the unrecognized gross tax benefit has been classified as a current liability as of December 31, 2015. This amount primarily represents unrecognized tax benefits composed of items related to assessed state income tax audits and negotiations.

The Company’s major income tax jurisdictions are the United States, Australia, Belgium, Canada, France, Germany and the United Kingdom. For U.S. federal income tax, the Company remains subject to examination for 2012 and subsequent years. For major U.S. states, with few exceptions, the Company remains subject to examination for 2011 and subsequent years. Generally, for the foreign countries, the Company remains subject to examination for 2008 and subsequent years.