13.	Income Taxes

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

	2017		2016			2015
Current:
Federal	$	83,743	$	62,054		$	71,386
State		7,567		6,447			6,050
Deferred:
Federal		4,696		12,477			(6,178	)
State		982		(3,858	)		3,040
Total provision for income taxes	$	96,988	$	77,120		$	74,298

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:

	2017			2016			2015
Provision computed at federal statutory income tax rate	$	104,611		$	93,247		$	83,370
State and local income taxes, net of federal benefit		5,856			1,427			6,378
Employer tax credits for FICA taxes paid on employee tip income		(11,543	)		(11,048	)		(10,681	)
Other employer tax credits		(2,814	)		(7,326	)		(5,058	)
Other-net		878			820			289
Total provision for income taxes	$	96,988		$	77,120		$	74,298

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

	July 28, 2017		July 29, 2016
Deferred tax assets:
Compensation and employee benefits	$	10,110	$	13,937
Deferred rent		18,270		17,183
Accrued liabilities		13,233		12,466
Insurance reserves		12,401		11,444
Inventory		4,411		4,368
Other		2,767		8,718
Deferred tax assets	$	61,192	$	68,116

Deferred tax liabilities:
Property and equipment	$	100,373	$	97,695
Inventory		10,906		9,803
Other		12,273		12,024
Deferred tax liabilities		123,552		119,522
Net deferred tax liability	$	62,360	$	51,406

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 28, 2017 and July 29, 2016, the Company’s gross liability for uncertain tax positions, exclusive of interest and penalties, was $20,731 and $21,899, 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 28, 2017			July 29, 2016			July 31, 2015
Balance at beginning of year	$	21,899		$	25,507		$	22,832
Tax positions related to the current year:
Additions		4,003			4,860			3,994
Reductions		--			--			--
Tax positions related to the prior year:
Additions		582			2,186			118
Reductions		(2,966	)		(6,896	)		(227	)
Settlements		(1,027	)		(2,324	)		(204	)
Expiration of statute of limitations		(1,760	)		(1,434	)		(1,006	)
Balance at end of year	$	20,731		$	21,899		$	25,507

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:

		2017				2016				2015
Uncertain tax positions		$	13,475			$	14,234			$	16,579

The Company had $6,128, $5,497 and $9,754 in interest and penalties accrued as of July 28, 2017, July 29, 2016, and July 31, 2015, respectively.

The Company recognized accrued interest and penalties related to unrecognized tax benefits of $631, $(4,256) and $1,194 in its provision for income taxes on July 28, 2017, July 29, 2016 and July 31, 2015, respectively. The increase from 2016 to 2017 and the decrease from 2015 to 2016 both are 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 28, 2017 by approximately $3,000 to $4,000 within the next twelve months. At July 28, 2017, the Company was subject to income tax examinations for its U.S. federal income taxes after 2013 and for state and local income taxes generally after 2013.