NOTE F — INCOME TAXES

The income tax provision is comprised of the following:

	Year Ended January 31,
	2016			2015			2014
	(In thousands)
Current
Federal	$	47,585		$	46,989		$	36,828
State and city		5,910			5,978			5,396
Foreign		7,768			5,688			7,040
		61,263			58,655			49,264
Deferred
Federal		3,458			1,422			(3,328	)
State and city		535			(67	)		189
Foreign		(456	)		(560	)		(299	)
		3,537			795			(3,438	)
Income tax expense	$	64,800		$	59,450		$	45,826
Income before income taxes
United States	$	149,578		$	133,709		$	104,435
Non-United States		29,555			34,732			17,793
	$	179,133		$	168,441		$	122,228

The significant components of the Company’s net deferred tax asset at January 31, 2016 and 2015 are summarized as follows:

	2016			2015
	(In thousands)
Deferred tax assets
Compensation	$	4,448		$	3,964
Provision for bad debts and sales allowances		11,180			10,254
Inventory write-downs		3,581			3,059
Other		1,717			1,671
Deferred tax assets, current		20,926			18,948
Compensation		8,597			6,855
Straight-line lease		3,713			5,128
Supplemental employee retirement plan		378			420
Net operating loss		1,637			1,613
Other		95			71
Deferred tax assets, non-current		14,420			14,087
Total deferred tax assets		35,346			33,035
Deferred tax liabilities
Prepaid expenses and other, current		(3,362	)		(2,876	)
Depreciation and amortization, non-current		(15,981	)		(10,563	)
Intangibles, non-current		(21,772	)		(23,631	)
Other		(507	)		(364	)
Total deferred tax liabilities		(41,622	)		(37,434	)

Net deferred tax liabilities	$	(6,276	)	$	(4,399	)

As of January 31, 2016 and 2015, intangible deferred tax liabilities of $14.3 million and $15.9 million, respectively, relate to intangible assets in Switzerland. The remaining intangible assets relate primarily to the U.S.

The following is a reconciliation of the statutory federal income tax rate to the effective rate reported in the financial statements for the years ended January 31:

	2016			2015			2014
Provision for Federal income taxes at the statutory rate		35.0	%		35.0	%		35.0	%
State and local income taxes, net of Federal tax benefit		2.4			2.3			3.0
Permanent differences resulting in Federal taxable income		3.6			2.9			4.5
Foreign tax rate differential		(1.4	)		0.1			(0.1	)
Foreign tax credit		(3.1	)		(6.5	)		(5.4	)
Other, net		(0.3)			1.5			0.5
Actual provision for income taxes		36.2	%		35.3	%		37.5	%

The Company accounts for uncertain income tax positions in accordance with ASC Topic 740 Income Taxes. The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. As of January 31, 2016, there was an increase in the unrecognized tax position reserve of approximately $66,000, net of federal tax benefit, for the current year accrual of interest and penalties on existing uncertain income tax positions reserves. The Company currently has tax years open from the years ended January 31, 2012 through January 31, 2015, with the exception of certain state tax jurisdictions.

The Company’s policy on classification is to include interest in “interest and financing charges” and penalties in “selling, general and administrative expenses” in the accompanying Consolidated Statements of Income and Comprehensive Income. The Company and certain of its subsidiaries are subject to U.S. Federal income tax as well as income tax of multiple state, local, and foreign jurisdictions. The Company is currently under U.S. Federal income tax examination for the year ended January 31, 2012. One of its foreign subsidiaries, T.R.B. International S.A., has a ruling with the Swiss government that taxes commercial foreign sourced income at an 11.6% rate. The ruling was extended to the year ending January 31, 2018.

Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $18.3 million at January 31, 2016. Those earnings are considered indefinitely reinvested and, accordingly, no provision for U.S. income taxes has been provided thereon. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries, as applicable. At this point in time it is not practical to estimate the amount of taxes payable if the earnings were remitted.