Note K — Income Taxes

Components of provision for income taxes are as follows:


	Years Ended December 31,
(in thousands)	2019		2018		2017
Current:
Federal	$	5,461	$	669	$	541
State		719		1,117		574
Total current		6,180		1,786		1,115
Deferred:
Federal		1,803		1,497		28,905
State		(5,029)		1,955		(2,723)
Total deferred		(3,226)		3,452		26,182
Total provision for income taxes	$	2,954	$	5,238	$	27,297

A reconciliation of the federal statutory tax rate to our effective tax rate applicable to continuing operations is as follows:


	Years Ended December 31,
	2019		2018		2017
Federal statutory tax rate	21.0	%	21.0	%	35.0	%
State and local income taxes	6.0	%	26.6	%	0.9	%
Change in valuation allowance	(22.5)	%	9.5	%	(0.7)	%
Permanent Items	2.3	%	27.9	%	(2.7)	%
Tax audit adjustments	0.9	%	8.7	%	—	%
Change in uncertain tax positions	0.2	%	5.5	%	(0.3)	%
Tax credits	(0.1)	%	(5.6)	%	0.1	%
State tax rate change effect on deferred balance	—	%	27.7	%	(0.2)	%
Federal statutory tax rate change effect on deferred balance	—	%	—	%	(45.0)	%
Goodwill impairment	—	%	—	%	(21.1)	%
Other	1.9	%	(1.7)	%	(1.3)	%
Tax provision	9.7	%	119.6	%	(35.3)	%

The significant components of our deferred tax assets and liabilities are presented in the following table:


	As of December 31,
(in thousands)	2019		2018
Deferred tax assets:
Lease liabilities	$	31,432	$	—
Provision for doubtful accounts and implicit price concessions		18,547		16,529
Accrued expenses		12,789		15,352
Property, plant and equipment		9,797		10,829
Interest expense		8,946		7,798
Deferred benefit plan compensation		8,834		6,269
Net operating loss carryforwards		7,636		10,975
Share based compensation		4,016		3,902
Inventory reserves		2,554		2,710
Refund liabilities		2,346		2,517
Intangibles		1,236		1,063
Interest on seller notes		961		1,029
Deferred rent		—		1,136
Other		893		1,307
Deferred tax assets		109,987		81,416
Less: Valuation allowance		(2,065)		(8,930)
Total deferred tax assets		107,922		72,486
Deferred tax liabilities:
Lease assets		28,360		—
Goodwill		7,960		5,821
Prepaid expenses		1,121		1,030
Total deferred tax liabilities		37,441		6,851
Net deferred tax assets	$	70,481	$	65,635

We provide a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. We have $2.8 million and $10.7 million of U.S. federal net operating loss carryforwards available as of December 31, 2019 and 2018, respectively. We have $136.9 million and $166.0 million of state net operating loss carryforwards available as of December 31, 2019 and 2018, respectively. These carryforwards will be used to offset future income but may be limited by the change in ownership rules in Section 382 of the Internal Revenue Code. These net operating loss carryforwards will expire in varying amounts between 2020 and 2039.

We establish valuation allowances when necessary to reduce deferred tax assets to amounts expected to be realized. As of December 31, 2019 and 2018, we have recorded a valuation allowance of approximately $2.1 million and $8.9 million, respectively, related to various state jurisdictions. In our assessment of the valuation allowance, we consider a number of types of evidence on a taxing jurisdiction and legal entity basis in each reporting period, including the nature, frequency, and severity of current and cumulative financial reporting income and losses, sources of future taxable income, future reversals of existing taxable temporary differences, and prudent and feasible tax planning strategies, weighted by objectivity. Based on our consideration of all available positive and negative evidence, we determined that it was more likely than not that we would be able to realize the benefit of certain state deferred tax assets after we achieved twelve quarters of cumulative pretax income adjusted for permanent differences, as well as forecasted future taxable income and other positive evidence, and released $7.1 million of the valuation allowance related to certain state deferred tax assets in the fourth quarter of 2019.

The following schedule presents the activity in the valuation allowance:


(in thousands)	Balance at								Balance at End of
Year	Beginning of Year		Acquisitions		Provision		Released		Year
2019	$	8,930	$	—	$	238	$	7,103	$	2,065
2018	$	8,754	$	—	$	204	$	28	$	8,930
2017	$	6,895	$	—	$	2,306	$	447	$	8,754

A reconciliation of our liability for unrecognized tax benefits is as follows:


(in thousands)	2019		2018		2017
Unrecognized tax benefits, at beginning of the year	$	4,765	$	4,860	$	4,664
Additions for tax positions related to the current year		247		257		466
Decrease related to prior year positions		(337)		(352)		(270)
Decrease for lapse of applicable statute of limitations		(344)		—		—
Unrecognized tax benefits, at end of the year	$	4,331	$	4,765	$	4,860

As of December 31, 2019, the total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is approximately $2.8 million. We do not expect unrecognized tax benefits to decrease within the next twelve months due to the lapse of statute limitations. We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2019, 2018, and 2017, the amount of accrued interest and penalties was approximately $1.0 million, $0.8 million, and $0.6 million, respectively.

We are subject to income tax in the U.S. federal, state, and local jurisdictions. We are no longer subject to U.S. federal income tax examinations for years prior to 2016. However, due to net operating loss carryforwards, tax authorities have the ability to adjust those net operating losses related to closed years. We believe the ultimate resolution of income tax examinations will not have a material adverse effect on our consolidated financial position, results of operations, or liquidity.