The effective tax rate from continuing operations was 27.0% in 2019, 218.7% in 2018 and 31.0% in 2017. A reconciliation of the Federal statutory income tax rate to the Company’s effective tax rate is as follows:

	Percent of Income before Income Taxes
	2019			2018			2017
Statutory Federal income tax rate		21.0	%		21.0	%		35.0	%
State income taxes - net of Federal tax benefit		5.2			42.5			8.3
Foreign tax rate differential		—			3.9			(1.6	)
Domestic production deduction		—			—			(5.2	)
Non-deductible expenses		1.0			93.8			0.4
Impact of tax law changes		—			22.1			(7.4	)
Changes in unrecognized tax benefits		0.4			42.9			0.9
Foreign tax incentives		(0.4	)		(3.1	)		—
Other		(0.2	)		(4.4	)		0.6
Effective tax rate for the year		27.0	%		218.7	%		31.0	%

Income (loss) from continuing operations before income taxes was attributable to the following sources:

	2019			2018		2017
United States	$	33,612		$	419	$	12,979
Foreign		(429	)		970		2,729
Totals	$	33,183		$	1,389	$	15,708

Income tax expense (benefit) from continuing operations consisted of the following:

	2019					2018					2017
	Current		Deferred			Current		Deferred			Current		Deferred
Federal	$	7,270	$	(447	)	$	9,694	$	(7,910	)	$	6,304	$	(4,394	)
Foreign		497		(538	)		1,218		(718	)		1,821		(883	)
State and local		2,123		63			1,575		(822	)		2,402		(386	)
	$	9,890	$	(922	)	$	12,487	$	(9,450	)	$	10,527	$	(5,663	)

On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Tax Act”). Effective January 1, 2018, the Tax Act established a corporate income tax rate of 21%, replacing the former 35% rate, and created a territorial tax system rather than a worldwide system, which generally eliminated the U.S. federal income tax on dividends from foreign subsidiaries. The transition to the territorial system included a one-time deemed repatriation transition tax (“Transition Tax”) on certain foreign earnings previously untaxed in the United States. At December 31, 2017, the Company recorded an initial provisional net benefit to income tax expense of $1.2 million related to the enactment of the Tax Act. This net benefit included a provisional deferred tax benefit of $3.0 million related to revaluing the net U.S. deferred tax liabilities to reflect the lower U.S. corporate tax rate. The deferred tax benefit was offset by a provision of $1.8 million related to the Transition Tax. Based on the finalized accounting and preparation of the Company’s 2017 U.S. Federal Tax Return, the Company recorded a reduction of income tax expense of $0.3 million for the year ended December 31, 2018 to reflect adjustments to the previously recognized provisional amounts under the Tax Act. In addition, in 2018 the Company recorded income tax expense of $0.6 million associated with an uncertain tax position related to the calculation of the Transition Tax included in the 2017 return.

During 2018, the Company recorded a provision and related deferred tax liability of $0.6 million related primarily to the earnings of the Company’s subsidiary in Guatemala, which were deemed by management to no longer be permanently reinvested. The E&P for all foreign subsidiaries has been previously included in the calculation of the Transition Tax, and thus, should there be a repatriation of earnings from any other foreign subsidiaries in future periods, the Company expects to be subject to only foreign withholding tax. Management does not currently anticipate a repatriation of earnings from any other foreign subsidiaries, except as provided above, as these earnings are deemed to be permanently reinvested.

Significant components of the Company’s deferred taxes as of December 31, 2019 and 2018 are as follows:

	2019			2018
Deferred income tax assets
Compensation	$	2,268		$	2,774
Inventory valuation		873			695
Allowance for uncollectible accounts		290			237
Provision for loss on note receivable		5,031			5,031
Non-deductible accruals		5,370			4,196
Operating lease liability		1,288			—
Non-deductible intangibles		1,862			1,574
State deferred taxes		730			843
Capital loss carryforwards		1,982			1,982
		19,694			17,332
Valuation allowance		(1,982	)		(1,982	)
		17,712			15,350
Deferred income tax liabilities
Property, plant and equipment		4,867			4,247
Tax-deductible goodwill		4,862			5,089
Right of use asset - operating leases		1,239			—
Other		937			744
		11,905			10,080
Net deferred income tax asset	$	5,807		$	5,270

Deferred tax assets are reduced by a valuation allowance, if based on all available evidence, it is more likely than not that the deferred tax asset will not be realized. Available evidence includes the reversal of existing taxable temporary differences, future taxable income exclusive of temporary differences, taxable income in carryback years and tax planning strategies. Based on the current available evidence, the Company considers the net deferred tax asset at December 31, 2019 to be fully realizable except for the deferred tax asset related to the capital loss carryforward described below.

As further discussed in Note 6, the Company sold its investments in certain Brazilian subsidiaries in December 2017. In connection with this divestiture, the Company incurred a capital loss of $9.5 million on its investment in the Myers do Brazil business and recorded a deferred tax asset of $2.0 million for this capital loss carryforward. A valuation allowance of $2.0 million is recorded against this deferred tax asset as the recovery of the asset is not more likely than not.

The Company also recorded a tax benefit of approximately $15 million generated as a result of a worthless stock deduction for the Novel do Nordeste business included in the divestiture. Although management believes that the worthless stock deduction is valid, there can be no assurance that the IRS will not challenge it and, if challenged, that the Company will prevail. This tax benefit is included in the net loss from discontinued operations for the year ended December 31, 2017. As a result of the Company’s U.S. Federal income tax filings in 2018, the Company reduced this estimated tax benefit by $0.7 million and recognized this adjustment within net loss from discontinued operations in the year ended December 31, 2018.

The following table summarizes the activity related to the Company’s unrecognized tax benefits:

	2019		2018		2017
Balance at January 1	$	955	$	359	$	478
Increases related to previous year tax positions		143		596		359
Reductions due to lapse of applicable statute of limitations		—		—		(478	)
Balance at December 31	$	1,098	$	955	$	359

The total amount of gross unrecognized tax benefits that would reduce the Company’s effective tax rate was $1.1 million, $1.0 million and $0.4 million at December 31, 2019, 2018 and 2017.

The Company and its subsidiaries file U.S. Federal, state and local, and non-U.S. income tax returns. As of December 31, 2019, the Company is no longer subject to U.S. Federal examinations by tax authorities for tax years before 2015. The Company’s 2017 U.S. Federal tax return is currently under audit by the Internal Revenue Service (“IRS”). The Company is subject to state and local examinations for tax years of 2013 through 2018. In addition, the Company is subject to non-U.S. income tax examinations for tax years of 2014 through 2018.