10.	INCOME TAXES

Income tax expense consists of the following:

	Year Ended December 31,
	2015			2014			2013
Current:
Federal	$	14,395		$	10,039		$	5,080
State		31			0			(10	)
		14,426			10,039			5,070
Deferred:
Federal		(662	)		(425	)		(435	)
State		(66	)		177			(1,125	)
		(728	)		(248	)		(1,560	)
	$	13,698		$	9,791		$	3,510

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

	Year Ended December 31,
	2015			2014			2013
Statutory federal income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefit		0			0.5			(0.6	)
Executive compensation limitation		0			0.9			1.6
Food donations		(1.2	)		(0.4	)		(2.8	)
Fixed assets		0.5			(1.4	)		0
Changes in reserves		(0.1	)		0.1			(6.7	)
Tax credits		(0.5	)		(0.5	)		(1.7	)
Other		0.8			(0.6	)		0.4
Expired charitable contribution carryover		1.9			0			0
Valuation allowance		(2.0	)		0			7.1
		34.4	%		33.6	%		32.3	%

The change in the effective tax rate from 2014 to 2015 was due to the write-off of certain deferred tax assets and liabilities offset by increased levels of food donations. The change in the effective tax rate from 2013 to 2014 was due to the changes in executive compensation, decreased levels of food donations and the reduction in tax reserves due to the lapse of the statute of limitations which offset a charge to record a valuation allowance for charitable contributions carryforwards that might not be realized due to the short carryforward period for this temporary difference.

The significant items comprising the Company’s deferred income tax assets and liabilities are as follows:

	December 31,
	2015			2014
Deferred tax asset:
Reserves and accrual	$	1,071		$	920
Goodwill/Intangible assets		801			235
Net operating loss carryforward		1,591			1,639
Stock-based compensation		1,839			1,880
Charitable contribution carryforward		1,895			3,180
Other		1,068			909
		8,265			8,763
Valuation allowance		0			(800	)
Deferred tax asset		8,265			7,963
Deferred tax liability:
Property and equipment		(966	)		(1,451	)
Net deferred tax asset	$	7,299		$	6,512

At December 31, 2015 and 2014, the Company had net operating loss carryforwards of approximately $28,696 and $29,474, respectively, for state tax purposes. For state tax purposes, there is a limitation on the amount of net operating loss carryforwards that can be utilized in a given year to offset state taxable income. Net operating losses will begin to expire in 2025.

In 2013, the Company recorded a valuation allowance of $800 against its deferred tax asset generated for charitable contributions. The Company recorded the valuation allowance to reduce the deferred tax asset to an amount it expects is more likely than not to be realized due to the short carryforward period for this temporary difference. In 2015, the Company wrote off the valuation allowance as certain charitable contribution carryovers expired. Based on the projected level of future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the remaining net deferred tax assets. An analysis of the activity of the valuation allowance is as follows:

	Year Ended December 31,
	2015			2014		2013
Balance at beginning of year	$	800		$	800	$	0
Additions charged to expense		0			0		800
Deductions		(800	)		0		0
Balance at end of year	$	0		$	800	$	800

The total amount of gross unrecognized tax benefits as of December 31, 2015, 2014 and 2013 was $272, $332 and $311, respectively. The total amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate is approximately $177, $216 and $202 as of December 31, 2015, 2014 and 2013, respectively. The Company records accrued interest and penalties related to unrecognized tax benefits as part of interest expense, net. During 2014 and 2013, the Company recognized interest income of $28 and $71, respectively, from interest and penalties. No interest income was recognized during 2015. The Company’s federal income tax returns for 2012 through 2014 are open and are subject to examination by the Internal Revenue Service. State tax jurisdictions that remain open to examination range from 2012 through 2014. The Company does not believe that that there will be any material changes to unrecognized tax positions over the next 12 months.

A reconciliation of the beginning and ending amounts of the total unrecognized tax benefit is as follows:

	Year Ended December 31,
	2015			2014			2013
Balance at beginning of year	$	332		$	311		$	1,474
Increase related to current year tax positions		19			15			60
Increase related to prior year tax positions		72			138			0
Decrease due to lapse of statute of limitations		(151	)		(132	)		(1,223	)
Balance at end of year	$	272		$	332		$	311