9.INCOME TAXES.

Federal and State income tax expense from continuing operations consist of the following:

	2014		2013			2012
Federal:
Current	$	2,242,641	$	4,102,557		$	988,639
Deferred	1,100,487		1,253,385			372,886
	3,343,128		5,355,942			1,361,525

State:
Current	227,648		761,633			(98,554		)
Deferred	429,879		(194,216		)	(1,198,336		)
	657,527		567,417			(1,296,890		)
Total	$	4,000,655	$	5,923,359		$	64,635

Deferred tax assets and deferred tax liabilities were as follows:

	2014			2013
Deferred tax assets:
Receivables	$	20,020		$	20,020
Inventories	550,170			937,161
Accrued liabilities	1,295,798			1,687,924
Net operating losses and credit carryforwards	1,336,649			1,615,046
Other	166,347			186,864
Total deferred tax assets	3,368,984			4,447,015

Deferred tax liabilities:
Depreciation	(4,357,310		)	(3,862,862		)
Prepaids and other	(775,759		)	(817,871		)
Total deferred tax liabilities	(5,133,069		)	(4,680,733		)
Net deferred tax liabilities	$	(1,764,085	)	$	(233,718	)

At December 27, 2014, the Company had state tax loss carryforwards of approximately $25 million available to offset future taxable income, expiring in various amounts through December 31, 2033.

A reconciliation of the tax provision for income taxes from continuing operations at the U.S. Statutory rate (35% in 2014, 34% in 2013 and 35% in 2012) to the effective income tax expense rate as reported is as follows:

	2014					2013					2012
U.S. Federal statutory rate	$	4,364,717		35.0	%	$	5,821,356		34.0	%	$	4,356,433		35.0	%
State income taxes, net of federal benefit	617,410			5.0		510,783			3.0		388,840			3.1
Tax-exempt underwriting income of wholly- owned small captive insurance subsidiary	(297,243		)	(2.4	)	(225,480		)	(1.3	)	—			—
Domestic production deduction	(281,688		)	(2.3	)	(167,800		)	(1.0	)	(304,300		)	(2.4	)
Research and development tax credits	(75,000		)	(0.6	)	(100,000		)	(0.6	)	—			—
Alternative fuel tax credit	(22,750		)	(0.2	)	(37,370		)	(0.2	)	—			—
Stock-based compensation	(117,395		)	(0.9	)	16,800			0.1		30,580			0.2
Valuation allowance	—			—		—			—		(4,589,180		)	(36.8	)
Other, net	(187,396		)	(1.5	)	105,070			0.6		182,262			1.4
Effective tax	$	4,000,655		32.1	%	$	5,923,359		34.6	%	$	64,635		0.5	%

Uncertain Tax Positions

The Company recognizes income tax benefits only when it is more likely than not that the tax position will be allowed upon examination by taxing authorities, which is presumed to occur. The amount of such tax benefit recorded is the largest amount that is more likely than not to be allowed. A reconciliation of the change in the unrecognized tax benefits for the three years ended December 27, 2014 is as follows:

Unrecognized tax benefits at January 1, 2012	$	719,612
Gross increases - tax positions in prior periods	22,430
Lapse of statute of limitations	(222,431		)
Unrecognized tax benefits at December 29, 2012	519,611
Gross increases - tax positions in prior periods	197,310
Lapse of statute of limitations	(57,921		)
Unrecognized tax benefits at December 28, 2013	659,000
Gross increases - tax positions in prior periods	157,657
Lapse of statute of limitations	(70,657		)
Unrecognized tax benefits at December 27, 2014	$	746,000

The entire balance of approximately $746,000 at December 27, 2014 relates to unrecognized tax positions that, if recognized, would affect the annual effective tax rate. The Company is subject to U.S. federal income tax as well as various state taxes. The Company is no longer subject to examination by federal taxing authorities for the fiscal year ended 2010 and earlier. The Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease over the next twelve months. Interest and penalties related to income tax matters are recognized in income tax expense. Interest and penalties accrued for, and recognized during, the fiscal years ended December 27, 2014, December 28, 2013, and December 29, 2012 were immaterial.