15.	INCOME TAXES

Income tax (benefit) provision was comprised of the following (in thousands):

	Year Ended			Four Months Ended			Year Ended
	January 30, 2016			January 31, 2015			September 30, 2014			September 30, 2013

Current (benefit) provision	$	(4,826	)	$	(3,890	)	$	6,581		$	16,017
Deferred provision (benefit)		2,020			(6,636	)		(2,975	)		(1,791	)
Deferred benefit of state net operating loss carryforwards, net of federal effect, recognized based on change in tax regulations		—			—			—			(1,216	)
Income tax (benefit) provision	$	(2,806	)	$	(10,526	)	$	3,606		$	13,010

Federal (benefit) provision	$	(1,962	)	$	(9,296	)	$	5,109		$	11,485
State (benefit) provision		(575	)		(1,165	)		(1,674	)		380
Foreign (benefit) provision		(269	)		(65	)		171			1,145
Income tax (benefit) provision	$	(2,806	)	$	(10,526	)	$	3,606		$	13,010

A reconciliation of the statutory federal tax rate to the Company’s effective income tax rates follows:

	Year Ended			Four Months Ended			Year Ended
	January 30, 2016			January 31, 2015			September 30, 2014			September 30, 2013

Statutory federal tax rate		(35.0	)%		(35.0	)%		35.0	%		35.0	%
State tax rate, net of federal effect		(2.3	)		(2.3	)		3.2			2.7
(Benefit) provision for uncertain income tax positions, net of federal effect		(2.8	)		(0.4	)		2.1			1.3
Settlements of uncertain income tax positions, net of federal effect		—			—			(13.0	)		—
Benefit of state net operating loss carryforwards, net of federal effect, recognized based on change in tax regulations		—			—			—			(3.3	)
Other		1.6			—			(1.7	)		(0.5	)
Effective income tax rate		(38.5	)%		(37.7	)%		25.6	%		35.2	%

The deferred tax effects of temporary differences giving rise to the Company’s net deferred tax assets were as follows (in thousands):

	January 30, 2016			January 31, 2015			September 30, 2014

Deferred tax assets:
Net operating loss carryforwards	$	11,296		$	3,457		$	3,141
Deferred rent		10,004			10,492			10,138
Employee benefit accruals		3,836			3,596			4,610
Inventory reserves		3,320			5,368			1,262
Grow NJ award benefit, net		2,493			—			—
Stock-based compensation		1,212			736			1,134
Federal tax credit carryforwards		618			140			—
Depreciation and amortization		—			1,722			107
Other accruals		1,896			2,642			2,458
Other		2,062			2,298			2,026
		36,737			30,451			24,876
Valuation allowance		(2,666	)		(1,925	)		(1,925	)
		34,071			28,526			22,951
Deferred tax liability:
Depreciation and amortization		(4,570	)		—			—
Prepaid expenses		(503	)		(541	)		(801	)
		(5,073	)		(541	)		(801	)

Net deferred tax assets	$	28,998		$	27,985		$	22,150

Based on the Company’s historical and projected levels of taxable income, management believes it is more likely than not that the Company will realize the net deferred tax assets as of January 30, 2016. There can be no assurance that the Company will generate taxable earnings or any specific level of earnings in the future.

During fiscal 2013 the Company recognized a state income tax benefit, net of federal effect and a valuation allowance, of $1,216,000, for the estimated carryforward tax benefit of certain state net operating losses, which had previously been projected to expire unused, based upon recently enacted changes in applicable state income tax regulations. The Company assessed that it was unlikely that sufficient future state specific taxable income will be generated to fully use the available state net operating loss carryforwards, and accordingly, a valuation allowance has been recorded to recognize only the portion of the deferred tax asset that is considered more likely than not to be realized. The Company does not record state tax benefits associated with temporary differences for certain other states in which it has net operating losses, given the continued historical uncertainty related to realizing such state tax benefits. Had the state tax benefits been reflected for these states, the deferred tax assets (excluding state net operating loss carryforwards) as of January 30, 2016 would be approximately $682,000 higher.

The accounting standard for uncertain income tax positions clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements and also contains guidance on the measurement of uncertain tax positions.

A reconciliation of gross unrecognized tax benefits for uncertain tax positions follows (in thousands):

	Year Ended			Four Months Ended			Year Ended
	January 30, 2016			January 31, 2015			September 30, 2014			September 30, 2013

Balance at beginning of period	$	1,537		$	1,691		$	4,218		$	4,063
Additions for current period tax positions		—			—			192			476
Additions for prior period tax positions		48			8			231			331
Reductions of prior period tax positions		(470	)		(162	)		(2,700	)		(12	)
Payments		(154	)		—			(250	)		(640	)
Balance at end of period	$	961		$	1,537		$	1,691		$	4,218

As of January 30, 2016 gross unrecognized tax benefits included accrued interest and penalties of $351,000. During fiscal 2015, 2014, 2013 and the four months ended January 31, 2015 interest and penalties of $(83,000), $(1,391,000), $341,000, and $(29,000), respectively, related to unrecognized tax benefits, were included in income tax (benefit) provision. If recognized, the portion of the liability for unrecognized tax benefits that would impact the Company’s effective tax rate was $719,000, net of federal tax benefit.

As of January 30, 2016, January 31, 2015 and September 30, 2014 the Company had income taxes receivable of $5,859,000, $6,778,000 and $2,542,000, respectively, which are included in prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets.

During the twelve months subsequent to January 30, 2016 it is reasonably possible that the gross unrecognized tax benefits could potentially decrease by approximately $100,000 (of which approximately $73,000, net of federal expense, would affect the effective tax rate) for uncertain tax positions, including the continued effect of interest on unrecognized tax benefits and limitations on certain potential tax credits, partially offset by the effect of expiring statutes of limitations and settlements.

The Company’s United States Federal income tax returns for the years ended September 30, 2012 and thereafter remain subject to examination by the United States Internal Revenue Service. The Company also files tax returns in Canada, India, Kuwait and numerous United States state jurisdictions, which have varying statutes of limitations. Generally, Canadian tax returns for tax years ended September 30, 2008 and thereafter, Indian tax returns for tax years ended March 31, 2010 and thereafter, Kuwaiti tax returns for tax years ended January 31, 2015 and thereafter and United States state tax returns for tax years ended September 30, 2011 and thereafter, depending upon the jurisdiction, remain subject to examination. However, the statutes of limitations on certain of the Company’s United States state tax returns remain open for tax years prior to fiscal 2011.