Income Taxes

The components of income (loss) before income taxes, by tax jurisdiction, were as follows for the periods indicated (in thousands):



	For the fiscal year ended
	December 27, 2016			December 29, 2015			December 30, 2014
United States	$	240,843		$	242,860		$	285,564
Canada	(11,344		)	(6,288		)	(8,270		)
Income before income taxes	$	229,499		$	236,572		$	277,294

The provision for income taxes consisted of the following for the periods indicated (in thousands):



	For the fiscal year ended
	December 27, 2016			December 29, 2015			December 30, 2014
Current taxes:
U.S. federal	$	72,757		$	83,005		$	73,234
U.S. state and local	15,169			16,242			14,306
Total current taxes	87,926			99,247			87,540
Deferred taxes:
U.S. federal	(3,062		)	(9,737		)	9,609
U.S. state and local	(606		)	(2,263		)	950
Foreign	—			—			(98		)
Total deferred taxes	$	(3,668	)	$	(12,000	)	$	10,461
Total provision for income taxes	$	84,258		$	87,247		$	98,001

A reconciliation of the statutory U.S. federal income tax rate to the Company's effective tax rate is as follows for the periods indicated:



	For the fiscal year ended
	December 27, 2016		December 29, 2015		December 30, 2014
Statutory U.S. federal rate	35.0	%	35.0	%	35.0	%
U.S. state and local income taxes, net of federal tax benefit	4.1		4.1		4.1
U.S. federal tax credits	(1.9	)	(1.8	)	(1.4	)
Other, including discrete tax items	(0.5	)	(0.4	)	(2.4	)
Effective tax rate	36.7	%	36.9	%	35.3	%

The decrease in the effective tax rate from fiscal 2015 to fiscal 2016 was primarily a result of an increased charitable deduction as a result of the Tax Relief Extension Act of 2015, partially offset by the recognition of $7.0 million of refranchising charges for which the Company cannot currently realize the associated tax benefit.

The increase in the effective tax rate for fiscal 2016 and 2015 as compared to fiscal 2014 was primarily due to the discrete income tax benefits reported during fiscal 2014 related to additional federal and state tax credits and an increased deduction for domestic production activities.

The tax effects of the significant temporary differences which comprise the deferred tax assets and liabilities were as follows for the periods indicated (in thousands):



	December 27, 2016			December 29, 2015
Deferred tax assets:
Accrued expenses	$	83,411		$	75,360
Capital loss carryforward	10,968			—
Stock-based compensation	5,739			4,705
Other	1,926			2,160
Foreign net operating loss carryforward	358			4,938
Less: valuation allowance	(11,326		)	(5,299		)
Total deferred tax assets	$	91,076		$	81,864
Deferred tax liabilities:
Property and equipment	$	(96,437	)	$	(92,580	)
Goodwill and other intangibles	(26,940		)	(25,252		)
Total deferred tax liabilities	$	(123,377	)	$	(117,832	)
Net deferred tax liability	$	(32,301	)	$	(35,968	)

In assessing the realization of deferred tax assets, the Company considers the generation of future taxable income and utilizes a more likely than not standard to determine if deferred tax assets will be realized. Based on this assessment, the Company has recorded a valuation allowance of $11.3 million and $5.3 million as of December 27, 2016 and December 29, 2015, respectively, as a full valuation allowance against all Canadian deferred tax assets, including the net operating loss carryforwards of the Company's Canadian operations. The Company’s capital loss carryforwards expire in 2021 and the Canadian net operating loss carryforwards expire in 2036.

As of December 27, 2016 and December 29, 2015, the amount of unrecognized tax benefits that, if recognized in full, would be recorded as a reduction of income tax expense was $6.9 million and $6.1 million, inclusive of applicable interest and penalties and net of federal tax benefits, respectively. Estimated interest and penalties related to the underpayment of income taxes are classified as a component of income tax expense in the Consolidated Statements of Income. These amounts were expense of $0.2 million, income of $0.2 million, and expense of $0.3 million, during fiscal 2016, fiscal 2015, and fiscal 2014, respectively. Accrued interest and penalties were $1.1 million and $0.9 million as of December 27, 2016 and December 29, 2015, respectively.

The following is a rollforward of the Company’s liability for unrecognized tax benefits for the periods indicated (in thousands):



	December 27, 2016			December 29, 2015			December 30, 2014
Beginning balance	$	6,668		$	6,455		$	2,999
Tax positions related to the current year:
Additions	1,131			1,339			1,536
Tax positions related to prior years:
Additions	422			—			2,671
Reductions	—			(483		)	—
Settlements	(113		)	(200		)	(131		)
Expiration of statutes of limitations	(556		)	(443		)	(620		)
Ending balance	$	7,552		$	6,668		$	6,455

The U.S. Internal Revenue Service has completed exams of the Company’s U.S. federal tax returns for fiscal years 2012 and prior. While certain state returns in fiscal years 2002 through 2012 may be subject to future assessment by taxing authorities, the Company is no longer subject to examination in Canada and most states in fiscal years prior to 2013.

It is reasonably possible that the Company’s liability for unrecognized tax benefits with respect to the Company’s uncertain tax positions will increase or decrease during the next twelve months; however, an estimate of the amount or range of the change cannot be made at this time.