9. Income Taxes

The items comprising the income tax provision are as follows:

	For the Years Ended December 31,
	2016		2015
Current tax provision:
Federal	$	-	$	-
State		800		800
Foreign		123,200		-
Current tax provision		124,000		800
Deferred tax provision:
Federal		581,200		3,539,900
State		45,100		43,000
Deferred tax provision		626,300		3,582,900
Total income tax provision	$	750,300	$	3,583,700

Total income tax expense differs from the amount that would be provided by applying the statutory federal income tax rate to pretax earnings as illustrated below:

	For the Years Ended December 31,
	2016		2015

Income tax provision at statutory federal income tax rate	$	670,500	$	3,407,200
State tax provision, net of federal benefit		45,200		44,300
Non-deductible expenses		34,600		-
Prior year withholding tax adjustment		-		132,200
Total income tax provision	$	750,300	$	3,583,700

Temporary differences and carry-forwards that give rise to a significant portion of deferred tax assets and liabilities as of December 31, 2016 and 2015 were as follows:

	December 31,
	2016			2015
Deferred tax assets:
Maintenance reserves	$	6,846,800		$	1,121,600
Current and prior year tax losses		4,016,000			313,200
Foreign tax credit		77,700			-
Alternative minimum tax credit		45,500			45,500
Deferred maintenance, bad debt allowance and other		62,100			34,700
Deferred tax assets		11,048,100			1,515,000
Deferred tax liabilities:
Accumulated depreciation on aircraft and aircraft engines		(23,012,800	)		(12,965,900	)
Deferred income		(865,800	)		(753,300	)
Net deferred tax liabilities	$	(12,830,500	)	$	(12,204,200	)

The current year federal operating loss carryovers of approximately $11 million will be available to offset taxable income in future years through 2036. The current year state operating loss carryovers of approximately $80,000 will be available to offset taxable income in future years through 2036. The Company expects to utilize the net operating loss carryovers remaining at December 31, 2016 in future years.

During the year ended December 31, 2016, the Company had pre-tax income from domestic sources of approximately $1.6 million and pre-tax income from foreign sources of approximately $388,000. The Company had no pre-tax income from foreign sources during the year ended December 31, 2015.

The foreign tax credit carryover will be available to offset federal tax expense in future years through 2026. The alternative minimum tax credit will be available to offset federal tax expense in excess of the alternative minimum tax in future years and does not expire.

At December 31, 2016 and December 31, 2015, the Company had no material uncertain tax positions.

The Company accounts for interest related to uncertain tax positions as interest expense, and for income tax penalties as tax expense.

All of the Company's tax years remain open to examination other than as barred in the various jurisdictions by statutes of limitation.