INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2015

Schedule of components of income tax expense

The components of the income tax expense (benefit) are as follows (in thousands):



	Year Ended December 31,
	2013			2014		2015
Current income tax expense:
Federal	$	95		11		$	1,492
State	62			7		65
Foreign	26			29		24
Total current expense	183			47		1,581
Deferred income tax expense (benefit):
Federal	(583		)	1,181		1,043
State	(54		)	123		284
Foreign	—			—		—
Total deferred expense (benefit)	(637		)	1,304		1,327
Total income tax expense (benefit)	$	(454	)	$	1,351	$	2,908

The components of income (loss) before income taxes were as follows (in thousands):



	Year Ended December 31,
	2013			2014		2015

Domestic	$	(1,508	)	$	2,837	$	8,325
Foreign	115			113		102
	$	(1,393	)	$	2,950	$	8,427

Temporary differences to the components of deferred tax assets

Temporary differences that give rise to the components of net deferred tax assets are as follows (in thousands):



	December 31,
	2014			2015
Inventory	$	643		$	954
Accrued compensation	124			267
Stock Options	57			344
Research and development	472			440
Alternative minimum tax credit	308			367
Deferred revenue	4,396			3,638
Property and equipment	1,777			1,967
Net operating loss carryforwards – domestic	40,277			37,845
Capital Lease	—			(384		)
Other	(131		)	(8		)
	47,923			45,430
Valuation allowance	(20,713		)	(19,547		)
Total net deferred tax assets	$	27,210		$	25,883

Effective income tax rate

The Company's income tax expense (benefit) relating to income (loss) for the periods presented differs from the amounts that would result from applying the federal statutory rate to that income (loss) as follows:



	Year Ended December 31,
	2013		2014		2015
Statutory federal tax rate	34	%	34	%	34	%
State income taxes, net of federal benefit	3	%	5	%	3	%
Non-controlling interest in Heska Imaging US, LLC	6	%	12	%	(1	)%
Other permanent differences	(10	)%	(3	)%	(1	)%
Change in tax rate	—	%	2	%	(1	)%
Foreign rate difference	(1	)%	—	%	—	%
Change in valuation allowance	(13	)%	78	%	(14	)%
Other	13	%	(82	)%	15	%
Effective income tax rate	32	%	46	%	35	%