10. Income Taxes

The provision for income taxes was as follows:

	For the Three Months Ended
	September 24, 2017			September 25, 2016
Provision for income taxes	$	3,196		$	3,726
Effective tax rate		26.3	%		29.0	%

The effective tax rates for the periods presented above are lower than the U.S. statutory tax rate primarily due to foreign income being taxed at lower rates and the benefit of increased research and development credits. These benefits were partially offset by losses in tax jurisdictions for which no tax benefit could be recognized and state and local income taxes net of federal benefits.

UNIFI regularly assesses the outcomes of both completed and ongoing examinations to ensure that UNIFI’s provision for income taxes is sufficient. Certain returns that remain open to examination have utilized carryforward tax attributes generated in prior tax years, including net operating losses (“NOLs”), which could potentially be revised upon examination.

Components of UNIFI’s deferred tax valuation allowance are as follows:

	September 24, 2017			June 25, 2017
Investment in a former domestic unconsolidated affiliate	$	(6,262	)	$	(6,269	)
Equity-method investment in PAL		(1,536	)		(1,520	)
Certain losses carried forward ⁽¹⁾		(5,924	)		(5,924	)
State NOLs		(108	)		(108	)
Other foreign NOLs⁽²⁾		(3,149	)		(3,347	)
Foreign tax credits		(997	)		(789	)
Total deferred tax valuation allowance	$	(17,976	)	$	(17,957	)

(1)	Certain U.S. NOLs and capital losses outside the U.S. consolidated tax filing group.

(2)	Presented net of certain NOL carryforward deferred tax assets.