Income Taxes

The table below provides, for the periods indicated, reconciliations of the Company’s effective tax rate from the federal statutory tax rate (amounts in thousands):



	Six months ended April 30,
	2014				2013
	$		%*		$		%*
Federal tax provision at statutory rate	57,652		35.0		17,253		35.0
State tax provision, net of federal benefit	7,851		4.8		2,051		4.2
Domestic production activities deduction	(4,251	)	(2.6	)
Other permanent differences	(2,338	)	(1.4	)
Reversal of accrual for uncertain tax positions	(9,112	)	(5.5	)
Accrued interest on anticipated tax assessments	1,126		0.7		1,982		4.0
Increase in unrecognized tax benefits	5,406		3.3
Valuation allowance – reversed	(1,226	)	(0.7	)	(1,277	)	(2.6	)
Other	(1,191	)	(0.7	)	179		0.4
Income tax provision	53,917		32.7		20,188		41.0



	Three months ended April 30,
	2014				2013
	$		%*		$		%*
Federal tax provision at statutory rate	32,719		35.0		14,339		35.0
State tax provision, net of federal benefit	4,866		5.2		1,705		4.2
Domestic production activities deduction	(2,417	)	(2.6	)
Other permanent differences	(1,324	)	(1.4	)
Reversal of accrual for uncertain tax positions	(9,112	)	(9.7	)
Accrued interest on anticipated tax assessments	340		0.4		817		2.0
Increase in unrecognized tax benefits	5,406		5.8
Valuation allowance – reversed	(778	)	(0.8	)	(1,061	)	(2.6	)
Other	(1,438	)	(1.5	)	494		1.2
Income tax provision	28,262		30.2		16,294		39.8

* Due to rounding, amounts may not add.

The Company currently operates in 20 states and is subject to various state tax jurisdictions. The Company estimates its state tax liability based upon the individual taxing authorities’ regulations, estimates of income by taxing jurisdiction, and the Company’s ability to utilize certain tax-saving strategies. Based on the Company’s estimate of the allocation of income or loss among the various taxing jurisdictions and changes in tax regulations and their impact on the Company’s tax strategies, the Company estimated its rate for the full fiscal year for state income taxes at 7.3% and 6.5% for fiscal 2014 and 2013, respectively.

For state tax purposes, due to past and projected losses in certain jurisdictions where the Company does not have carryback potential and/or cannot sufficiently forecast future taxable income, the Company has recognized net cumulative valuation allowances against its state deferred tax assets of $54.5 million and $55.7 million as of April 30, 2014 and October 31, 2013, respectively.