Note 10—Income Taxes

The following table summarizes the provision for income taxes.


	Year Ended December 31,
	2011			2010		2009
Current:
Federal	$	15,053,000		$	15,398,000	$	17,086,000
State		4,488,000			3,889,000		4,439,000

		19,541,000			19,287,000		21,525,000
Deferred:
Federal		296,000			323,000		(1,988,000	)
State		(181,000	)		68,000		(544,000	)

		115,000			391,000		(2,532,000	)

Tax Provision	$	19,656,000		$	19,678,000	$	18,993,000

Deferred income taxes are recorded using the asset and liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and income tax basis of assets and liabilities.

Significant components of our federal and state deferred tax assets and liabilities are as follows:


	Years Ended December 31
	2011			2010
Net current deferred assets (liabilities):
Allowance for doubtful accounts	$	1,794,000		$	1,625,000
Accrued insurance claims — current		2,108,000			2,028,000
Expensing of housekeeping supplies		(4,176,000	)		(3,556,000	)
Other		(677,000	)		(701,000	)

	$	(951,000	)	$	(604,000	)

Net noncurrent deferred assets (liabilities):
Deferred compensation	$	6,046,000		$	5,199,000
Non-deductible reserves		11,000			25,000
Depreciation of property and equipment		(3,019,000	)		(1,394,000	)
Accrued insurance claims — noncurrent		4,920,000			4,731,000
Amortization of intangibles		(78,000	)		(626,000	)
Other		301,000			174,000

	$	8,181,000		$	8,109,000

Realization of the Company's deferred tax assets is dependent upon future earnings in specific tax jurisdictions, the timing and amount of which are uncertain. Management assesses the Company's income tax positions and records tax benefits for all years subject to examination based upon an evaluation of the facts, circumstances, and information available at the reporting dates, which include historical operating results and expectations of future earnings. As such, management believes it is more likely than not that the current and noncurrent deferred tax assets recorded will be realized to reduce future income taxes and therefore no valuation allowances are necessary.

A reconciliation of the provision for income taxes and the amount computed by applying the statutory federal income tax rate to income before income taxes is as follows:


	Year Ended December 31,
	2011			2010			2009
Tax expense computed at statutory rate	$	20,234,000		$	18,942,000		$	17,266,000
Increases (decreases) resulting from:
State income taxes, net of federal tax benefit		2,800,000			2,572,000			2,551,000
Federal jobs credits		(4,196,000	)		(1,615,000	)		(881,000	)
Tax exempt interest		(253,000	)		(370,000	)		(504,000	)
Other, net		1,071,000			149,000			561,000

	$	19,656,000		$	19,678,000		$	18,993,000

Management performs an evaluation each period of its tax positions taken and expected to be taken in tax returns. The evaluation is performed on positions relating to tax years that remain subject to examination by major tax jurisdictions, the earliest of which is tax year ended December 31, 2008. Based on our evaluation, management has concluded that there are no significant uncertain tax positions requiring recognition in our financial statements. Therefore, the table reporting on the change in the liability for unrecognized tax benefits during the year ended December 31, 2011 is omitted as there is no activity to report in such account for the year ended December 31, 2011, and there was no balance of unrecognized tax benefits at the beginning of the year.

We may from time to time be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. In the event we have received an assessment for interest and/or penalties, it has been classified in the financial statements as selling, general and administrative expense.

Income taxes paid for the last three fiscal years are as follows:


	Year Ended December 31,
	2011		2010		2009
Income taxes paid	$	14,614,000	$	21,251,000	$	17,789,000