INCOME TAXES

The Company accounts for income taxes using ASC 740, “Income Taxes” which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized differently in the financial statements and the tax returns. The provision for income taxes consists of the following at December 31:



($ in thousands)	2019		2018		2017
Total (benefit) provision:	$	3,980	$	1,320	$	(1,283	)
Federal:
Current	1,798		862		(1,266		)
Deferred	866		64		255
	2,664		926		(1,011		)
State:
Current	812		353		(120		)
Deferred	504		41		(152		)
	1,316		394		(272		)
	$	3,980	$	1,320	$	(1,283	)

The provision for income taxes for fiscal year 2017 included a $54,000 estimated tax expense as a result of the revaluation of federal net deferred tax assets from 34% to 21% due to the impact of the enactment of U.S. Tax Reform. During 2018, the Company completed its analysis of the impacts of the U.S. Tax Reform and no additional expense was warranted. Other provisions of the U.S. Tax Reform did not have a material effect on our effective tax rate for 2018.

A reconciliation of the provision for income taxes, with the amount computed by applying the statutory Federal income tax rate of 21% in 2019 and 2018 and 34% for 2017 is as follows for the years ended December 31:



($ in thousands)	2019			2018			2017
Income tax at statutory rate	$	3,058		$	1,171		$	(1,046	)
State income taxes, net of Federal benefit	948			317			(185		)
Oil and mineral depletion	(131		)	(134		)	(180		)
Permanent differences	26			19			25
Excess stock compensation expense	(57		)	(20		)	107
U.S. Tax Reform adjustment	—			—			54
Other	136			(33		)	(58		)
Provision (benefit) for income taxes	$	3,980		$	1,320		$	(1,283	)
Effective tax rate	27.3		%	23.8		%	41.3		%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities were as follows at December 31:



($ in thousands)	2019		2018
Deferred income tax assets:
Accrued expenses	$	349	$	318
Deferred revenues	370		697
Capitalization of costs	1,843		1,937
Pension adjustment	2,883		2,937
Stock grant expense	2,500		2,674
State deferred taxes	116		25
Book deferred gains	1,176		941
Joint venture allocations	533		1,091
Provision for additional capitalized costs	699		699
Interest rate swap	810		—
Other	39		155
Total deferred income tax assets	$	11,318	$	11,474
Deferred income tax liabilities:
Deferred gains	$	490	$	32
Depreciation	2,892		3,100
Cost of sales allocations	872		872
Joint venture allocations	5,070		4,914
Straight line rent	590		611
Prepaid expenses	333		298
State deferred taxes	208		256
Interest rate swap	—		28
Other	150		134
Total deferred income tax liabilities	$	10,605	$	10,245
Net deferred income tax asset	$	713	$	1,229
Allowance for deferred tax assets	—		—
Net deferred taxes	$	713	$	1,229

Due to the nature of our deferred tax assets, the Company believes they will be used through operations in future years and a valuation allowance is not necessary.

The Company made income tax payments of $4,645,000 in 2019 and made no payments in 2018. The Company received refunds of $1,345,000 and $164,000 in 2019 and 2018, respectively.

The Company evaluates its tax positions for all income tax items based on their technical merits to determine whether each position satisfies the “more likely than not to be sustained upon examination” test. The tax benefits are then measured as the largest amount of benefit, determined on a cumulative basis, that is “more likely than not” to be realized upon ultimate settlement. As a result of this evaluation, the Company determined there were no uncertain tax positions that required recognition and measurement for the years ended December 31, 2019 and 2018 within the scope of ASC 740, "Income Taxes." Tax years from 2016 to 2018 and 2015 to 2018 remain available for examination by the Federal and California State taxing authorities, respectively.