10. Income Taxes

The Company recorded income tax expense in the current year of $9,090,000, as compared to $5,403,000 and $439,000 in 2012 and 2011, respectively.

Income tax expense from operations is comprised of the following:


	Year Ended September 30,
	2013		2012			2011
Current federal expense (benefit)	$	124,000	$	(10,000	)	$	(3,167,000	)
Current state expense		693,000		500,000			238,000
Deferred federal expense		6,251,000		4,737,000			3,920,000
Deferred state expense (benefit)		2,022,000		176,000			(552,000	)

Total	$	9,090,000	$	5,403,000		$	439,000

The income tax provision differs from the amount computed by applying the statutory federal income tax rate to income (losses) from continuing operations before income taxes as follows:


	Year Ended September 30,
	2013			2012			2011
Tax expense (benefit) computed at statutory rate of 35%	$	6,850,000		$	5,781,000		$	(982,000	)
Change in valuation allowance		1,265,000			—			(19,000	)
State income tax expense (benefit), net of federal tax		1,486,000			433,000			(284,000	)
Foreign losses		(987,000	)		—			—
Transaction costs		—			(1,353,000	)		1,353,000
Other		476,000			542,000			371,000

Income tax expense	$	9,090,000		$	5,403,000		$	439,000

The principal components of the Company’s net deferred tax liability are as follows:


	September 30,
	2013			2012
Deferred tax assets:
Deferred revenue	$	1,255,000		$	1,265,000
Restricted stock		390,000			579,000
Workers’ compensation		224,000			270,000
State tax net operating loss (NOL) carry forward		802,000			691,000
Federal tax NOL carry forward		9,012,000			12,776,000
Foreign tax NOL carry forward		952,000			—
Self-insurance		286,000			298,000
Canadian start-up costs		405,000			153,000
AMT credit carry forward		310,000			177,000
Other		166,000			210,000

Total gross deferred tax assets		13,802,000			16,419,000
Less valuation allowance		(1,265,000	)		—

Total net deferred tax assets		12,537,000			16,419,000
Deferred tax liabilities:
Property and equipment		(46,563,000	)		(42,172,000	)

Total deferred tax liabilities		(46,563,000	)		(42,172,000	)

Net deferred tax liability	$	(34,026,000	)	$	(25,753,000	)

Current portion of net deferred tax asset/liability	$	1,664,000		$	1,925,000
Non-current portion of net deferred tax asset/liability		(35,690,000	)		(27,678,000	)

Total net deferred tax liability	$	(34,026,000	)	$	(25,753,000	)

At September 30, 2013, the Company had a gross NOL for U.S. federal income tax purposes of approximately $25,750,000. This NOL expires in 2031. The Company will carry forward the net federal NOL of approximately $9,012,000. The Company also had net state NOLs that will affect state taxes of approximately $802,000 at September 30, 2013. State NOLs will begin to expire in 2015. Carryback provisions are not allowed by all states, so the entire state NOLs give rise to a deferred tax asset. Several of these carryforwards are primarily available in states where the Company believes the assets cannot be deemed to be more likely than not realizable. Based on management’s belief that the net operating loss carryforwards are not realizable, a $278,000 valuation allowance was established to offset these deferred tax assets as of September 30, 2013. The Company also has Canadian deferred tax assets that will begin to expire in 2032. The Company has recorded a valuation allowance of $987,000 against the Canadian deferred tax asset because management believes it is currently not more likely than not to be realizable. The Company had no valuation allowances as of September 30, 2012.

As of September 30, 2013, the Company did not recognize any liabilities for unrecognized tax benefits. All of the liabilities for unrecognized tax benefits totaling $161,000 lapsed in the statutes of limitations during fiscal 2012. The Company did not record any changes in prior year tax positions, current year tax positions or settlements with taxing authorities related to uncertain tax positions during fiscal 2013 or 2012.

The Company’s practice is to recognize interest and penalties related to unrecognized tax benefits in income tax expense. There were no interest and penalties recognized in fiscal year 2013. In fiscal year 2012 and 2011, there were interest and penalties included in the Consolidated Statements of Operations of $(98,000) and $(11,000), respectively.