(

) Income Taxes

The components of the provision for income taxes are as follows:

	Year Ended
	September 29,			September 30,			October 1,
(Dollars in thousands)	2018			2017			2016
Current:
Federal	$	8,265		$	8,269		$	17,075
State		906			848			1,434
		9,171			9,117			18,509
Deferred:
Federal		(2,862	)		2,455			396
State		55			48			140
		(2,807	)		2,503			536

Income taxes	$	6,364		$	11,620		$	19,045

Effective income tax rate		14.9	%		34.0	%		33.8	%

The reconciliation between income taxes computed at the federal statutory rate and the provision for income taxes is as follows:

	Year Ended
(Dollars in thousands)	September 29, 2018					September 30, 2017					October 1, 2016
Provision for income taxes at federal statutory rate	$	10,444		24.5	%	$	11,959		35.0	%	$	19,701		35.0	%
Change in federal tax rate - Tax Cuts and Jobs Act		(3,307	)	(7.8	)		-		-			-		-
Qualified production activities deduction		(832	)	(2.0	)		(768	)	(2.2	)		(1,596	)	(2.8	)
Excess tax benefits of stock-based compensation		(634	)	(1.5	)		-		-			-		-
Valuation allowance		(18	)	(0.0	)		(29	)	(0.1	)		(213	)	(0.4	)
State income taxes, net of federal tax benefit		739		1.7			598		1.8			1,093		1.9
Other, net		(28	)	(0.0	)		(140	)	(0.5	)		60		0.1
Provision for income taxes	$	6,364		14.9	%	$	11,620		34.0	%	$	19,045		33.8	%

The components of deferred tax assets and liabilities are as follows:

	September 29,			September 30,
(In thousands)	2018			2017
Deferred tax assets:
Defined benefit plans	$	2,302		$	3,556
Accrued expenses and asset reserves		1,939			3,069
Stock-based compensation		1,120			1,907
State net operating loss carryforwards and tax credits		233			284
Valuation allowance		(233	)		(251	)
Deferred tax assets		5,361			8,565

Deferred tax liabilities:
Plant and equipment		(9,490	)		(15,093	)
Prepaid insurance and other reserves		(1,211	)		(1,575	)
Deferred tax liabilities		(10,701	)		(16,668	)
Net deferred tax liability	$	(5,340	)	$	(8,103	)

December 22, 2017,

the Tax Cuts and Jobs Act (the “Act”) was enacted, which, among other changes, reduced the federal statutory corporate tax rate from

35%

21%

effective

January 1, 2018.

Since our fiscal year ends on the Saturday closest to

September 30

rather than the calendar year, we are subject to IRS rules relating to transitional income tax rates. Based on these rules, our federal statutory rate was

24.5%

for fiscal

2018

and will be

21%

for fiscal

2019

and beyond. Based on the provisions of the Act, we remeasured our deferred tax assets and liabilities and adjusted our estimated annual federal income tax rate to incorporate the lower corporate tax rate into our tax provision during our

first

fiscal quarter which resulted in a

$3.3

million reduction of income tax expense. We are still in process of evaluating the income tax effect of the Act on the executive compensation limitations that will be effective for our fiscal year

2019.

As of

September 29, 2018,

we recorded a deferred tax liability (net of valuation allowance) of

$5.3

million in other liabilities on our consolidated balance sheet. As of

September 30, 2017,

we recorded a deferred tax liability (net of valuation allowance) of

$8.1

million in other liabilities on our consolidated balance sheet. We have

$6.6

million of state net operating loss carryforwards (“NOLs”) that begin to expire in

2019,

but principally expire between

2019

and

2032.

We have also recorded deferred tax assets of

$16,000

for various state tax credits that begin to expire in

2019,

but principally expire between

2019

and

2020.

The realization of our deferred tax assets is entirely dependent upon our ability to generate future taxable income in applicable jurisdictions. GAAP requires that we periodically assess the need to establish a reserve against our deferred tax assets to the extent we

longer believe it is more likely than

not

that they will be fully realized. As of

September 29, 2018,

we recorded a valuation allowance of

$233,000

pertaining to various state NOLs and tax credits that were

not

expected to be utilized. The valuation allowance is subject to periodic review and adjustment based on changes in facts and circumstances and would be reduced should we utilize the state NOLs and tax credits against which an allowance had previously been provided or determine that such utilization was more likely than

not.

The

$18,000

decrease in the valuation allowance during

2018

is primarily due to the expiration of state NOLs for which an allowance had been previously recorded.

As of

September 29, 2018,

we had

material, known tax exposures that required the establishment of contingency reserves for uncertain tax positions.

We classify interest and penalties related to unrecognized tax benefits as part of income tax expense. There were

interest and penalties related to unrecognized tax benefits incurred during

2018,

2017

and

2016.

We file U.S. federal income tax returns as well as state and local income tax returns in various jurisdictions. Federal and various state tax returns filed subsequent to

2013

remain subject to examination.