The Tax Cuts and Jobs Act of 2017 (“Tax Act”) was signed into law on December 22, 2017 with an effective date of January 1, 2018. Most notably, the Tax Act reduced the statutory federal income tax rate for corporations from 35% to 21%. Since we file our tax return based on our fiscal year, the statutory federal income tax rate for our 2018 tax return was a blended rate of 28.1%. In addition to the effect of the lower overall federal tax rate, the Tax Act resulted in a $9.5 million one-time benefit for the re-measurement of our net deferred tax liability in 2018.

We file a consolidated federal income tax return. Taxes based on income for the years ended June 30 have been provided as follows:



	2020		2019		2018
Currently payable:
Federal	$	23,392	$	30,220	$	40,766
State and local	6,808		8,070		7,355
Total current provision	30,200		38,290		48,121
Deferred federal, state and local provision (benefit)	11,894		6,703		(9,232		)
Total taxes based on income	$	42,094	$	44,993	$	38,889

For the years ended June 30, our effective tax rate varied from the statutory federal income tax rate as a result of the following factors:



	2020		2019		2018
Statutory rate	21.0	%	21.0	%	28.1	%
State and local income taxes	3.1		3.5		3.0
Net windfall tax benefits - stock-based compensation	(0.8	)	(0.8	)	(0.4	)
ESOP dividend deduction	(0.1	)	(0.1	)	(0.1	)
One-time benefit on re-measurement of net deferred tax liability	—		—		(5.5	)
Domestic manufacturing deduction for qualified income	—		—		(2.3	)
Other	0.3		(0.6	)	(0.5	)
Effective rate	23.5	%	23.0	%	22.3	%

Our net deferred tax liability for all periods presented in the Consolidated Balance Sheets has been classified as noncurrent. The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at June 30 were comprised of:



	2020			2019
Deferred tax assets:
Employee medical and other benefits	$	8,384		$	7,809
Operating lease liabilities	5,713			—
Inventories	2,382			311
Receivables	2,371			2,332
Other accrued liabilities	1,938			2,069
Total deferred tax assets	20,788			12,521
Deferred tax liabilities:
Property, plant and equipment	(30,036		)	(16,993		)
Goodwill	(11,390		)	(10,037		)
Intangible assets	(7,848		)	(8,295		)
Operating lease right-of-use assets	(5,333		)	—
Other	(421		)	(78		)
Total deferred tax liabilities	(55,028		)	(35,403		)
Net deferred tax liability	$	(34,240	)	$	(22,882	)

Prepaid federal income taxes of $5.3 million and $5.2 million were included in Other Current Assets at June 30, 2020 and 2019, respectively.

The gross tax contingency reserve at June 30, 2020 was $1.0 million and consisted of estimated tax liabilities of $0.5 million and interest and penalties of $0.5 million. The unrecognized tax benefits recorded as the gross tax contingency reserve noted in the following table for June 30, 2020 and 2019 would affect our effective tax rate, if recognized.

The following table sets forth changes in our total gross tax contingency reserve (including interest and penalties):



	2020			2019
Balance, beginning of year	$	1,670		$	1,298
Tax positions related to the current year:
Additions	—			87
Reductions	—			—
Tax positions related to prior years:
Additions	51			694
Reductions	(25		)	(26		)
Settlements	(728		)	(383		)
Balance, end of year	$	968		$	1,670

We have not classified any of the gross tax contingency reserve at June 30, 2020 in Accrued Liabilities as none of these amounts are expected to be resolved within the next 12 months. Consequently, the entire liability of $1.0 million was included in Other Noncurrent Liabilities. We expect that the amount of these liabilities will change within the next 12 months; however, we do not expect the change to have a significant effect on our financial position or results of operations.

We recognize interest and penalties related to these tax liabilities in income tax expense. For each of the years ended June 30, we recognized the change in the accrual for net tax-related interest and penalties as follows:

We file federal and various state and local income tax returns in the United States. With limited exceptions, we are no longer subject to examination of U.S. federal or state and local income taxes for years prior to 2017.

The American Jobs Creation Act provided a tax deduction calculated as a percentage of qualified income from manufacturing in the United States. This deduction was repealed by the Tax Act. Therefore, 2018 was the final year that we were able to claim this deduction.