9. INCOME TAX

The following table provides a reconciliation between income taxes calculated at the statutory federal tax rate and the provision for income taxes reflected in the consolidated statements of comprehensive income for December 31:



Dollars in thousands	2016			2015			2014
Income taxes at federal statutory rate	$	34,863		$	31,310		$	35,117
Increase (decrease):
Current state income tax, net of federal tax benefit	4,582			4,195			4,666
Amortization of investment tax credits	(41		)	(118		)	(201		)
Differences required to be flowed-through by regulatory commissions	2,357			2,357			2,357
Gains on company and trust-owned life insurance	(594		)	(766		)	(689		)
Other, net	(453		)	(1,225		)	393
Total provision for income taxes	$	40,714		$	35,753		$	41,643
Effective tax rate	40.9		%	40.0		%	41.5		%

The effective income tax rate for 2016 compared to 2015 increased primarily as a result of lower depletion deductions from gas reserves activity in 2016. The effective income tax rate decrease from 2015 compared to 2014 was primarily due to the benefit from the realization of deferred depletion benefits from 2013 and 2014.

The provision for current and deferred income taxes consists of the following at December 31:



In thousands	2016		2015		2014
Current
Federal	$	7,402	$	10,558	$	14,823
State	2,042		61		24
	9,444		10,619		14,847
Deferred
Federal	26,219		18,729		18,635
State	5,051		6,405		8,161
	31,270		25,134		26,796
Total provision for income taxes	$	40,714	$	35,753	$	41,643

The following table summarizes the total provision (benefit) for income taxes for the utility and non-utility business segments for December 31:



In thousands	2016			2015			2014
Utility:
Current	$	10,300		$	15,890		$	24,317
Deferred	28,749			20,834			19,518
Deferred investment tax credits	(41		)	(118		)	(201		)
	39,008			36,606			43,634
Non-utility business segments:
Current	(856		)	(5,271		)	(9,470		)
Deferred	2,562			4,418			7,479
	1,706			(853		)	(1,991		)
Total provision for income taxes	$	40,714		$	35,753		$	41,643

The following table summarizes the tax effect of significant items comprising our deferred income tax accounts at December 31:



In thousands	2016		2015
Deferred tax liabilities:
Plant and property	$	428,642	$	408,342
Regulatory income tax assets	43,048		47,427
Regulatory liabilities	48,291		46,400
Non-regulated deferred tax liabilities	51,446		49,683
Total	$	571,427	$	551,852
Deferred tax assets:
Pension and postretirement obligations	$	4,493	$	4,666
Alternative minimum tax credit carryforward	9,853		16,699
Loss and credit carryforwards	—		514
Total	14,346		21,879
Deferred income tax liabilities, net	557,081		529,973
Deferred investment tax credits	4		48
Deferred income taxes and investment tax credits	$	557,085	$	530,021

Management assesses the available positive and negative evidence to estimate if sufficient taxable income will be generated to utilize the existing deferred tax assets. Based upon this assessment, we have determined we are more likely than not to realize all deferred tax assets recorded as of December 31, 2016.

The Company estimates it has alternative minimum tax (AMT) credits of $9.9 million. The AMT credits do not expire. All other tax attributes have been fully utilized in the current year.

As a result of certain realization requirements prescribed in the accounting guidance for income taxes, the tax benefit of statutory depletion is recognized no earlier than the year in which the depletion is deductible on the Company’s federal income tax return. Income tax expense decreased by $0.9 million in 2015 as a result of realizing deferred depletion benefit from 2013 and 2014. This benefit is included in Other in the statutory rate reconciliation table.

Uncertain tax positions are accounted for in accordance with accounting standards that require management’s assessment of the anticipated settlement outcome of material uncertain tax positions taken in a prior year, or planned to be taken in the current year. Until such positions are sustained, we would not recognize the uncertain tax benefits resulting from such positions. No reserves for uncertain tax positions existed as of December 31, 2016, 2015, or 2014.

The Company’s federal income tax returns for tax years 2012 and earlier are closed by statute. The IRS Compliance Assurance Process (CAP) examination of the 2013 and 2014 tax years were completed in the first and fourth quarters of 2015, respectively. There were no material changes to these returns as filed. The 2015 and 2016 tax years are currently under IRS CAP examination. The Company’s 2017 CAP application has been accepted by the IRS. Under the CAP program, the Company works with the IRS to identify and resolve material tax matters before the tax return is filed each year. As of December 31, 2016, income tax years 2013 through 2016 remain open for state examination.