13.	Income Taxes

The components of the provision for income taxes for each of the three years were as follows:

	2016			2015			2014
Current:
Federal	$	62,054		$	71,386		$	53,713
State		6,447			6,050			4,597
Deferred:
Federal		12,477			(6,178	)		(2,863	)
State		(3,858	)		3,040			3,274
Total provision for income taxes	$	77,120		$	74,298		$	58,721

A reconciliation of the Company’s provision for income taxes and income taxes based on the statutory U.S. federal rate of 35% was as follows:

	2016			2015			2014
Provision computed at federal statutory income tax rate	$	93,247		$	83,370		$	66,797
State and local income taxes, net of federal benefit		1,427			6,378			5,029
Employer tax credits for FICA taxes paid on employee tip income		(11,048	)		(10,681	)		(9,962	)
Other employer tax credits		(7,326	)		(5,058	)		(3,781	)
Other-net		820			289			638
Total provision for income taxes	$	77,120		$	74,298		$	58,721

Significant components of the Company’s net deferred tax liability consisted of the following at:

	July 29, 2016		July 31, 2015
Deferred tax assets:
Compensation and employee benefits	$	13,937	$	13,721
Deferred rent		17,183		16,022
Accrued liabilities		12,466		16,869
Insurance reserves		11,444		12,074
Inventory		4,368		4,525
Other		8,718		2,606
Deferred tax assets	$	68,116	$	65,817

Deferred tax liabilities:
Property and equipment	$	97,695	$	88,651
Inventory		9,803		11,568
Other		12,024		9,534
Deferred tax liabilities		119,522		109,753
Net deferred tax liability	$	51,406	$	43,936

The Company believes that adequate amounts of tax, interest and penalties have been provided for potential tax uncertainties; these amounts are included in other long-term liabilities in the Consolidated Balance Sheets. As of July 29, 2016 and July 31, 2015, the Company’s gross liability for uncertain tax positions, exclusive of interest and penalties, was $21,899 and $25,507, respectively. Summarized below is a tabular reconciliation of the beginning and ending balance of the Company’s total gross liability for uncertain tax positions exclusive of interest and penalties:

	July 29, 2016			July 31, 2015			August 1, 2014
Balance at beginning of year	$	25,507		$	22,832		$	20,972
Tax positions related to the current year:
Additions		4,860			3,994			3,989
Reductions		--			--			--
Tax positions related to the prior year:
Additions		2,186			118			1,400
Reductions		(6,896	)		(227	)		(1,630	)
Settlements		(2,324	)		(204	)		(755	)
Expiration of statute of limitations		(1,434	)		(1,006	)		(1,144	)
Balance at end of year	$	21,899		$	25,507		$	22,832

If the Company were to prevail on all uncertain tax positions, the reversal of this accrual would be a tax benefit to the Company and impact the effective tax rate. The following table highlights the amount of uncertain tax positions, exclusive of interest and penalties, which, if recognized, would affect the effective tax rate for each of the three years:

		2016				2015				2014
Uncertain tax positions		$	14,234			$	16,579			$	14,840

The Company had $5,497, $9,754 and $8,559 in interest and penalties accrued as of July 29, 2016, July 31, 2015, and August 1, 2014, respectively.

The Company recognized accrued interest and penalties related to unrecognized tax benefits of $(4,256), $1,194 and $691 in its provision for income taxes on July 29, 2016, July 31, 2015 and August 1, 2014, respectively. The decrease from 2015 to 2016 is attributable to the Company’s revaluation of select reserves and audit settlements in 2016.

In many cases, the Company’s uncertain tax positions are related to tax years that remain subject to examination by the relevant taxing authorities. Based on the outcome of these examinations or as a result of the expiration of the statutes of limitations for specific taxing jurisdictions, it is reasonably possible that the related uncertain tax positions taken regarding previously filed tax returns could decrease from those recorded as liabilities for uncertain tax positions in the Company’s financial statements at July 29, 2016 by approximately $2,000 to $3,000 within the next twelve months. At July 29, 2016, the Company was subject to income tax examinations for its U.S. federal income taxes after 2012 and for state and local income taxes generally after 2012.