Income Taxes (Tables)

12 Months Ended

Dec. 30, 2017

Income tax expense consisted of the following (in thousands):

The following table provides a reconciliation between the statutory federal income tax rate and our effective income tax rate:



	2017		2016		2015
Statutory federal income tax	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	2.5		2.6		3.0
Manufacturing deduction	(3.5	)	(3.3	)	(1.7	)
Effect of 2018 deferred tax rate change	(1.9	)	—		—
Changes in unrecognized tax benefits	(0.6	)	1.2		0.3
Non-taxable acquisition-related transactions	—		—		(2.6	)
Other	(3.0	)	(3.2	)	(1.0	)
Effective income tax rate	28.5	%	32.3	%	33.0	%

The tax effects of temporary differences that give rise to deferred income taxes were as follows (in thousands):



	2017			2016
Deferred tax assets:
Stock-based compensation	$	6,940		$	9,834
Deferred rent and lease incentives	6,007			8,388
Warranty and returns liabilities	6,602			7,948
Net operating loss carryforwards and credits	3,240			6,368
Compensation and benefits	3,315			4,115
Other	3,321			5,264
Total gross deferred tax assets	29,425			41,917
Valuation allowance	(615		)	(620		)
Total deferred tax assets after valuation allowance	28,810			41,297
Deferred tax liabilities:
Property and equipment	21,475			27,049
Deferred revenue	723			3,279
Other	3,987			6,302
Total gross deferred tax liabilities	26,185			36,630
Net deferred tax assets	$	2,625		$	4,667

Reconciliations of the beginning and ending amounts of unrecognized tax benefits for 2017, 2016 and 2015 were as follows (in thousands):



	Federal and State Tax
	2017			2016			2015
Beginning balance	$	3,460		$	2,077		$	742
Increases related to current-year tax positions	330			326			1,277
Increases related to prior-year tax positions	87			1,594			113
Decreases related to prior-year tax positions	(1,038		)	—			—
Lapse of statute of limitations	—			(333		)	(55		)
Settlements with taxing authorities	—			(204		)	—
Ending balance	$	2,839		$	3,460		$	2,077