(5) Income Taxes

The items comprising income tax expense are as follows (in thousands):

	Year ended December 31,
	2013			2012		2011
Current — Federal	$	12,541		$	8,934	$	9,973
— State		1,065			1,050		880
		13,606			9,984		10,853

Deferred — Federal		(1,063	)		1,363		2,372
— State		140			99		212
		(923	)		1,462		2,584
Total income tax expense	$	12,683		$	11,446	$	13,437

Temporary differences and carryforwards which have given rise to deferred income tax assets and liabilities as of December 31, 2013 and 2012 are as follows (in thousands):

	2013		2012
Deferred tax assets:
Benefit plans	$	1,590	$	1,099
Inventories		525		536
Other		37		38
Total deferred tax assets	$	2,152	$	1,673
Deferred tax liabilities:
Property, plant and equipment	$	9,716	$	10,299
Patents and goodwill		2,956		2,972
Other		166		11
Total deferred tax liabilities	$	12,838	$	13,282

Net deferred tax liability	$	10,686	$	11,609

Balance Sheet classification:
Non-current deferred income tax liability	$	12,062	$	12,232
Current deferred income tax asset		1,376		623
Net deferred tax liability	$	10,686	$	11,609

Total income tax expense differs from the amount that would be provided by applying the statutory federal income tax rate to pretax earnings as illustrated below (in thousands):

	Year ended December 31,
	2013			2012			2011
Income tax expense at the statutory federal income tax rate	$	13,743		$	12,276		$	13,816
Increase (decrease) resulting from:
State income taxes		770			747			710
Section 199 manufacturing deduction		(1,307	)		(949	)		(996	)
Other, net		(523	)		(628	)		(93	)
Total income tax expense	$	12,683		$	11,446		$	13,437

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits as required by ASC 740 is as follows (in thousands):

Gross unrecognized tax benefits at January 1, 2011	$	1,420
Decreases in tax positions for prior years		(77	)
Increases in tax positions for current year		134
Lapse in statutes of limitation		(216	)
Gross unrecognized tax benefits at December 31, 2011	$	1,261
Increase in tax positions for prior years		19
Increase in tax positions for current year		0
Decrease due to settlement with taxing authorities		(641	)
Lapse in statutes of limitation		(98	)
Gross unrecognized tax benefits at December 31, 2012	$	541
Increase in tax positions for prior years		11
Increase in tax positions for current year		0
Lapse in statutes of limitation		(206	)
Gross unrecognized tax benefits at December 31, 2013	$	346

As of December 31, 2013 all of the unrecognized tax benefits, which were comprised of uncertain tax positions, would impact the effective tax rate if recognized. Unrecognized tax benefits that are affected by statutes of limitation that expire within the next 12 months are immaterial.

We are subject to United States federal income tax as well as to income tax of multiple state jurisdictions. We have concluded all United States federal income tax matters for years through 2009. In January 2009, the Internal Revenue Service (“IRS”) began examining certain of our United States federal income tax returns for 2006, 2007 and 2008. This audit was favorably concluded in the third quarter of 2012 when the IRS appeals group allowed 100% of the tax credits claimed for our research and development during those years. Our unrecognized tax benefits were reduced at that time on the basis of this favorable settlement in the amount of approximately $641,000. All material state and local income tax matters have been concluded for years through 2009.

We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. The liability for unrecognized tax benefits included accrued interest of $21,000, $26,000 and $77,000 at December 31, 2013, 2012 and 2011, respectively. Tax expense for the year ended December 31, 2013, 2012 and 2011 included a net interest benefit of $5,400, $51,000 and $7,000, respectively.