On December 22, 2017, the Tax Cuts and Jobs Act (the "TCJA") was enacted in the United States. The TCJA represents sweeping changes in U.S. tax law. Among the numerous changes in tax law, the TCJA permanently reduces the U.S. corporate income tax rate to 21% beginning in 2018; allows 100% expensing for qualified property placed in service after September 27, 2017; imposes a one-time transition tax on deferred foreign earnings; establishes a participation exemption system by allowing a 100% dividends received deduction on qualifying dividends paid by foreign subsidiaries; limits deductions for net interest expense; and expands the U.S. taxation of foreign earned income to include "global intangible low taxed income".

The TCJA represents the first significant change in U.S. tax law in over 30 years. In response to the TCJA, the Staff of the U.S. Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 ("SAB No. 118") to provide guidance to registrants in applying ASC Topic 740 in connection with the TCJA. SAB No. 118 provides that in the period of enactment, the income tax effects of the TCJA may be reported as a provisional amount based on a reasonable estimate (to the extent a reasonable estimate can be determined), which would be subject to adjustment during a "measurement period". The measurement period begins in the reporting period of the TCJA's enactment and ends when a registrant has obtained, prepared, and analyzed the information that was needed in order to complete the accounting requirements under ASC Topic 740. SAB No. 118 also describes supplemental disclosures that should accompany the provisional amounts.

As permitted by SAB No. 118, the net tax expense recorded in our financial statements for the fourth fiscal quarter of 2017 due to the enactment of the TCJA is considered "provisional," based on reasonable estimates. As of December 29, 2018 we have finalized our analysis of the TCJA and no material adjustments to the provisional amounts have been recorded. We continue to assess the impacts of the TCJA on future years and monitor the Internal Revenue Service guidance intended to interpret the TCJA provisions. We recognized tax expense of $4.4 million in fiscal 2017 to remeasure our net deferred tax assets at the lower 21% rate.

The TCJA transitions the U.S. from a worldwide tax system to a territorial tax system. Under previous law, companies could indefinitely defer U.S. income taxation on unremitted foreign earnings. The TCJA imposed a one-time transition tax on deferred foreign earnings of 15.5% for liquid assets and 8% for illiquid assets, payable in defined increments over eight years. We did not recognize any transition tax expense due to having no accumulated earnings and profits in our non-U.S. subsidiaries.

(in thousands)	2018			2017			2016
Current:
Federal	$	33,362		$	56,641		$	61,251
State		2,618			8,293			5,948
Foreign		1,611			379			-
		37,591			65,313			67,199
Deferred:
Federal		1,398			4,582			(4,563	)
State		186			343			(325	)
Foreign		(1,642	)		(249	)		-
		(58	)		4,676			(4,888	)
Total	$	37,533		$	69,989		$	62,311

The following is a reconciliation of income taxes at the statutory tax rate to the Company's effective tax rate:

	2018			2017			2016
Federal taxes at statutory rate		21.0	%		35.0	%		35.0	%
State taxes, net of federal tax benefit		1.3			3.4			2.2
Research and development tax credit		(0.4	)		(0.3	)		(0.2	)
Federal permanent items		(0.1	)		(0.4	)		—
Tax reform		—			2.5			—
Other		0.1			(0.6	)		—
Effective tax rate		21.9	%		39.6	%		37.0	%

At December 29, 2018, we had $2.4 million of unrecognized tax benefits, $2.1 million of which would affect our effective tax rate if recognized.

The following table summarizes the change in uncertain tax benefits for the three years ended December 29, 2018:

(in thousands)	2018			2017			2016
Balance at beginning of year	$	2,301		$	3,567		$	1,855
Reductions due to lapses in statutes of limitations		(95	)		(181	)		—
Reductions due to tax positions settled		(368	)		(4,543	)		(109	)
Reductions due to reversals of prior year positions		(4	)		—			(212	)
Additions based on tax positions taken during the prior period		—			3,005			—
Additions based on tax positions taken during the current period		556			453			2,033
Balance at end of year	$	2,390		$	2,301		$	3,567

We recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 29, 2018, we had approximately $0.6 million of accrued interest and penalties related to uncertain tax positions.

Deferred income taxes result from timing differences in the recognition of revenue and expense for tax and financial statement purposes. The sources of temporary differences are as follows:

(in thousands)	December 29, 2018			December 30, 2017
Assets:
Inventories	$	9,006		$	7,335
Accounts receivable		11,052			11,732
Accrued expenses		1,792			1,664
Foreign tax credits		1,050			—
Other		—			261
Total deferred tax assets		22,900			20,992
Valuation allowance		(1,050	)		—
Net deferred tax assets		21,850			20,992
Liabilities:
Depreciation		9,094			7,936
Goodwill and intangible assets		11,310			11,776
Other		12			—
Gross deferred tax liabilities		20,416			19,712
Net deferred tax assets	$	1,434		$	1,280

Based on our history of taxable income and our projection of future earnings, we believe that it is more likely than not that sufficient taxable income will be generated in the foreseeable future to realize the remaining net deferred tax assets.

We file income tax returns in the United States, India, China, Canada and Mexico. All years before 2015 are closed for federal tax purposes. Tax years before 2014 are closed for the states in which we file. Tax years before 2015 are closed for tax purposes in China and Canada. All tax years remain open for Mexico and all tax years are closed for Sweden.