6. INCOME TAXES

The provision for income taxes is comprised of the following:



	For the Fiscal Years Ended
	September 2,		September 3,		August 29,
	2017		2016		2015
Current:
Federal	$	108,347	$	109,699	$	109,575
State and local		16,059		15,621		17,339
		124,406		125,320		126,914
Deferred:
Federal		10,938		13,993		13,987
State and local		1,217		1,202		932
		12,155		15,195		14,919
Total	$	136,561	$	140,515	$	141,833

Significant components of deferred tax assets and liabilities are as follows:


	September 2,		September 3,
	2017		2016
Deferred tax liabilities:
Depreciation	$	(56,382)	$	(53,580)
Deferred catalog costs		(1,079)		(1,347)
Goodwill		(103,218)		(88,607)
		(160,679)		(143,534)
Deferred tax assets:
Accounts receivable		4,441		4,089
Inventory		9,794		9,995
Deferred compensation		1,280		1,710
Stock-based compensation		9,140		9,813
Intangible amortization		9,517		11,933
Other accrued expenses/reserves		17,445		9,087
		51,617		46,627
Net Deferred Tax Liabilities	$	(109,062)	$	(96,907)

Reconciliation of the statutory Federal income tax rate to the Company’s effective tax rate is as follows:



	For the Fiscal Years Ended
	September 2,		September 3,		August 29,
	2017		2016		2015
U.S. Federal statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of Federal benefit	3.0		3.0		3.1
Other, net	(0.9)		(0.2)		(0.1)
Effective income tax rate	37.1	%	37.8	%	38.0	%

The aggregate changes in the balance of gross unrecognized tax benefits during fiscal 2017 and 2016 were as follows:



	September 2,		September 3,
	2017		2016
Beginning Balance	$	10,610	$	10,333
Additions for tax positions relating to current year		3,261		2,745
Additions for tax positions relating to prior years		1,015		—
Settlements		—		(174)
Lapse of statute of limitations		(2,245)		(2,294)
Ending Balance	$	12,641	$	10,610

Included in the balance of unrecognized tax benefits at September 2, 2017 is $1,049 related to tax positions for which it is reasonably possible that the total amounts could significantly change during the next twelve months. This amount represents a decrease in unrecognized tax benefits comprised primarily of items related to expiring statutes of limitations in state jurisdictions.

The Company recognizes interest expense and penalties in the provision for income taxes. The fiscal years 2017, 2016 and 2015 provisions include interest and penalties of $245, $6 and $19, respectively. The Company has accrued $305 and $235 for interest and penalties as of September 2, 2017 and September 3, 2016, respectively.

With limited exceptions, the Company is no longer subject to Federal income tax examinations through fiscal 2013 and state income tax examinations through fiscal 2012.