7. INCOME TAXES

The provision for income taxes is comprised of the following:



	For the Fiscal Years Ended
	September 1, 2012		August 27, 2011		August 28, 2010
Current:
Federal	$	128,640	$	99,034	$	74,917
State and local		18,421		15,986		10,916
		147,061		115,020		85,833
Deferred:
Federal		4,797		15,385		4,303
State and local		1,253		139		319
		6,050		15,524		4,622
Total	$	153,111	$	130,544	$	90,455

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



	September 1, 2012			August 27, 2011
Deferred tax liabilities:
Depreciation	$	(41,812	)	$	(37,544	)
Deferred catalog costs		(1,779	)		(2,435	)
Goodwill		(35,841	)		(30,216	)
		(79,432	)		(70,195	)
Deferred tax assets:
Accounts receivable		2,030			1,753
Inventory		5,703			5,589
Deferred compensation		1,272			1,061
Stock based compensation		9,981			9,129
Intangible amortization		7,027			5,037
Other		5,705			5,962
		31,718			28,531
Net Deferred Tax Liabilities	$	(47,714	)	$	(41,664	)

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



	For the Fiscal Years Ended
	September 1, 2012			August 27, 2011			August 28, 2010
U.S. Federal statutory rate		35.0	%		35.0	%		35.0	%
State income taxes, net of Federal benefit		2.7			2.8			2.8
Other, net		(0.5	)		(0.4	)		(0.2	)
Effective income tax rate		37.2	%		37.4	%		37.6	%

The aggregate changes in the balance of gross unrecognized tax benefits during fiscal 2012 and 2011 were as follows:



	September 1, 2012			August 27, 2011
Beginning Balance	$	11,393		$	10,836
Additions for tax positions relating to current year		2,294			2,679
Additions for tax positions relating to prior years		74			1,064
Reductions for tax positions relating to prior years		(1,540	)		(663	)
Settlements		(1,144	)		—
Lapse of statute of limitations		(3,266	)		(2,523	)
Ending Balance	$	7,811		$	11,393

Included in the balance of unrecognized tax benefits at September 1, 2012 is $1,552 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 in Federal and state jurisdictions.

The Company recognizes interest expense and penalties in the provision for income taxes. The fiscal 2012 and 2011 provisions include interest and penalties of $79 and ($26), respectively. The Company has accrued $253 and $642 for interest and penalties as of September 1, 2012 and August 27, 2011, respectively.

With limited exceptions, the Company is no longer subject to Federal income tax examinations and state jurisdictions through fiscal 2008.