4. Income taxes

The provision (benefit) for income taxes consists of the following:

(In thousands)	2015		2014			2013
Current:
Federal	$	590,120	$	543,089		$	530,728
Foreign		1,678		1,245			1,324
State		84,021		81,816			101,174

		675,819		626,150			633,226

Deferred:
Federal		6,410		(7,697	)		(16,132	)
State		5,715		(2,937	)		(13,880	)

		12,125		(10,634	)		(30,012	)

	$	687,944	$	615,516		$	603,214

A reconciliation between actual income taxes and amounts computed by applying the federal statutory rate to income before income taxes is summarized as follows:

(Dollars in thousands)	2015					2014					2013
U.S. federal statutory rate on earnings before income taxes	$	648,558		35.0	%	$	588,303		35.0	%	$	569,916		35.0	%
State income taxes, net of federal income tax benefit		59,700		3.2			49,819		3.0			56,822		3.5
Jobs credits, net of federal income taxes		(21,366	)	(1.2	)		(18,961	)	(1.1	)		(19,348	)	(1.2	)
Increase (decrease) in valuation allowances		(1,371	)	(0.1	)		1,453		0.1			(437	)	—
Decrease in income tax reserves		(2,037	)	(0.1	)		(6,449	)	(0.4	)		(6,391	)	(0.4	)
Other, net		4,460		0.3			1,351		—			2,652		0.1

	$	687,944		37.1	%	$	615,516		36.6	%	$	603,214		37.0	%

The 2015 effective tax rate was an expense of 37.1%. This expense was greater than the federal statutory tax rate of 35% due primarily to the inclusion of state income taxes in the total effective tax rate. The 2015 effective income tax rate increased from 2014 due principally to federal and state reserve releases in 2014 that did not reoccur, to the same extent, in 2015.

The 2014 effective tax rate was an expense of 36.6%. This expense was greater than the federal statutory tax rate of 35% due primarily to the inclusion of state income taxes in the total effective tax rate. The 2014 effective income tax rate decreased from 2013 due principally to the favorable resolution of state income tax examinations and a reduction in other state income tax reserve increases.

The 2013 effective tax rate was an expense of 37.0%. This expense was greater than the federal statutory tax rate of 35% due primarily to the inclusion of state income taxes in the total effective tax rate.

Deferred taxes reflect the effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:

(In thousands)	January 29, 2016			January 30, 2015
Deferred tax assets:
Deferred compensation expense	$	8,200		$	8,842
Accrued expenses		8,139			5,146
Accrued rent		20,793			19,360
Accrued insurance		72,676			76,197
Accrued incentive compensation		19,902			14,866
Share based compensation		17,988			17,623
Interest rate hedges		3,702			4,318
Tax benefit of income tax and interest reserves related to uncertain tax positions		1,371			1,502
Deferred gain on sale-leaseback		22,637			24,385
Other		9,440			3,550
State tax credit carry forwards, net of federal tax		10,711			11,039

		195,559			186,828
Less valuation allowances		(1,474	)		(2,845	)

Total deferred tax assets		194,085			183,983

Deferred tax liabilities:
Property and equipment		(320,619	)		(302,531	)
Inventories		(72,456	)		(73,188	)
Trademarks		(433,548	)		(433,328	)
Other		(7,417	)		(1,794	)

Total deferred tax liabilities		(834,040	)		(810,841	)

Net deferred tax liabilities	$	(639,955	)	$	(626,858	)

Deferred tax assets (liabilities) at January 30, 2015 include the reclassification of current deferred tax assets and liabilities to noncurrent. See Note 1 for additional information.

The Company has state tax credit carry forwards of approximately $16.5 million that will expire beginning in 2021 through 2024.

A valuation allowance has been provided for state tax credit carry forwards. The 2015 decrease of $1.4 million was recorded as a reduction in income tax expense. The 2014 increase of $1.5 million and 2013 decrease of $0.4 million were recorded as an increase and a reduction in income tax expense, respectively. Based upon expected future income, management believes that it is more likely than not that the results of operations will generate sufficient taxable income to realize the deferred tax assets after giving consideration to the valuation allowance.

The Company's 2010 and earlier tax years are not open for further examination by the Internal Revenue Service ("IRS"). Due to the filing of an amended federal income tax return for the 2011 tax year, the IRS may, to a limited extent, examine the Company's 2011 income tax filings. The IRS, at its discretion, may also choose to examine the Company's 2012 through 2014 fiscal year income tax filings. The Company has various state income tax examinations that are currently in progress. Generally, the Company's 2011 and later tax years remain open for examination by the various state taxing authorities.

As of January 29, 2016, accruals for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $7.0 million, $0.9 million and $0.8 million, respectively, for a total of $8.7 million. This total amount is reflected in noncurrent Other liabilities in the consolidated balance sheet.

As of January 30, 2015, accruals for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $9.3 million, $1.0 million and $0.4 million, respectively, for a total of $10.7 million. This total amount is reflected in noncurrent Other liabilities in the consolidated balance sheet.

The Company believes that it is reasonably possible that the reserve for uncertain tax positions may be reduced by approximately $2.6 million in the coming twelve months principally as a result of the effective settlement of outstanding issues. Also, as of January 29, 2016, approximately $7.0 million of the uncertain tax positions would impact the Company's effective income tax rate if the Company were to recognize the tax benefit for these positions.

The amounts associated with uncertain tax positions included in income tax expense consists of the following:

(In thousands)	2015			2014			2013
Income tax expense (benefit)	$	(2,379	)	$	(9,497	)	$	(3,915	)
Income tax related interest expense (benefit)		(23	)		(1,445	)		590
Income tax related penalty expense (benefit)		373			51			30

A reconciliation of the uncertain income tax positions from February 1, 2013 through January 29, 2016 is as follows:

(In thousands)	2015			2014			2013
Beginning balance	$	9,343		$	19,583		$	22,237
Increases—tax positions taken in the current year		214			198			3,484
Increases—tax positions taken in prior years		17			62			3,000
Decreases—tax positions taken in prior years		(106	)		(8,636	)		(608	)
Statute expirations		(2,504	)		(1,121	)		(7,622	)
Settlements		—			(743	)		(908	)

Ending balance	$	6,964		$	9,343		$	19,583