9. Provision (Benefit) For (From) Income Taxes

Provision (benefit) for (from) income taxes consists of the following:

Current income tax expense (benefit), which represents the amount of federal tax and state and local tax currently payable, including interest and penalties and amounts accrued for unrecognized tax benefits, if any, and;

Deferred income tax expense (benefit), which represents the net change in the deferred tax assets balance during the year, including any change in the valuation allowance of the deferred tax assets, if any.

For the three and nine months ended September 30, 2019, there was no change in the valuation allowance of the historical net operating losses. For the three and nine months ended September 2018, there was a partial release of the valuation allowance of historical net operating losses of approximately $1.4 million.

The change in deferred tax assets for the three and nine months ended September 30, 2019 was due to the utilization of federal and state net operating losses and temporary differences in the depreciation of fixed assets.

The following table presents the components of provision (benefit) for (from) for income taxes for the periods indicated (unaudited):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019		2018
Current income tax expense (benefit)
Federal	$	161,000		$	300,000		$	295,000	$	847,000
State		223,000			58,000			405,000		61,000
		384,000			358,000			700,000		908,000

Deferred income tax expense (benefit)
Federal		(50,000	)		(423,000	)		261,000		(423,000	)
State		19,000			(970,000	)		210,000		(970,000	)
		(31,000	)		(1,393,000	)		471,000		(1,393,000	)

Total Provision (Benefit) For (From) Income Taxes	$	353,000		$	(1,035,000	)	$	1,171,000	$	(485,000	)

Effective Tax Rate

For interim financial reporting, the Company estimates the effective tax rate for tax jurisdictions which is applied to the year to date income before provision (benefit) for (from) income taxes. For the three months ended September 30, 2019 and 2018, the Company’s effective tax rate was 24% and -50%, respectively. For the nine months ended September 30, 2019 and 2018, the Company’s effective tax rate was 27% and -8%, respectively.

As of December 31, 2018, the Company recorded an income tax benefit related to the recognition of deferred tax assets of $5,576,000. The increase in the effective tax rate in 2019 was due to an increase in deferred income tax expense corresponding to the decrease in the deferred tax assets. Deferred income tax expense (benefit) was -$31,000 and $471,000 for the three months and nine months ended September 30, 2019, respectively.