	December 31,
	2018		2017		2016
Domestic	$	66,495	$	117,273	$	91,597
International		43,310		24,552		35,942
Total	$	109,805	$	141,825	$	127,539

	December 31,
	2018			2017			2016
Current:
Federal	$	10,486		$	25,201		$	21,167
State		(80	)		-			-
International		8,247			5,674			10,491
Total current		18,653			30,875			31,658
Deferred:
Federal	$	(1,420	)	$	7,615		$	8,350
State		(656	)		-			-
International		19			(429	)		206
Total deferred		(2,057	)		7,186			8,556
Total income tax expense	$	16,596		$	38,061		$	40,214

The provision for income taxes differs from the statutory federal income tax rate of 21% for 2018, and 35% for 2017 and 2016, as follows:

	December 31,
	2018			2017			2016
Income tax provision at U.S federal statutory rate	$	23,059		$	49,639		$	44,638
State and local taxes, net of federal income tax benefit		(2,539	)		(207	)		(2,310	)
Effect of foreign income taxed at rates other than the U.S. federal statutory rate		44			(1,989	)		(1,154	)
Tax credits		(280	)		(100	)		(200	)
Net change in valuation allowance		476			(315	)		1,673
Domestic production deduction		-			(3,347	)		(2,327	)
Share-based payment compensation		(3,722	)		(5,236	)		-
Tax reform and changes in tax laws		(1,939	)		117			-
Permanent items and other		1,497			(501	)		(106	)
Total	$	16,596		$	38,061		$	40,214

The domestic production deduction was repealed by TCJA. Share-based payment compensation represents the impact of applying ASU 2016-09, which requires recognition immediately in the tax provision of certain effects of share-based payments that were possibly deferred under the previous guidance. Tax reform and changes in tax laws represents the impact of TCJA, New Jersey tax reform enacted in 2018, and other enacted tax rate changes.

The Company’s accounting for TCJA’s one-time toll charge on previously undistributed accumulated foreign earnings was completed in the third quarter of 2018, resulting in a $2,105 measurement period tax benefit and corresponding reduction in taxes payable. The Company has determined that it will elect an accounting policy to treat tax on global low-taxed income (“GILTI”) inclusions under TCJA as a period cost when incurred.

The components of deferred tax assets and liabilities as of December 31, 2018 and 2017 relate to temporary differences and carryforwards as follows:

	December 31,
	2018			2017
Deferred tax assets:
Inventory	$	2,082		$	1,522
Environmental		3,656			3,635
Net operating loss carryforwards		12,347			11,447
Employee benefits		9,512			11,245
Property, plant and equipment		11,581			5,007
Other		4,332			3,712
Total gross deferred tax assets		43,510			36,568
Valuation allowance		(12,263	)		(11,824	)
Total deferred tax assets	$	31,247		$	24,744
Deferred tax liabilities:
Property, plant and equipment		(69,337	)		(15,275	)
Intangibles and other		(14,536	)		(8,537	)
Foreign tax allocation reserve		(2,527	)		(2,710	)
Other		(714	)		(2,830	)
Total deferred tax liabilities	$	(87,114	)	$	(29,352	)
Net deferred tax liability	$	(55,867	)	$	(4,608	)
Classified as follows in the consolidated balance sheet:
Non-current deferred tax asset		1,409			3,198
Non-current deferred tax liability		(57,276	)		(7,806	)
Total	$	(55,867	)	$	(4,608	)

The Company expects to maintain a domestic valuation allowance against state NOLs and state credits tax due to restrictive rules regarding realization and recent history of state losses. The Company expects to maintain a valuation allowance against certain foreign deferred tax assets, primarily NOL carryforwards, until such time as the Company attains an appropriate level of future profitability in the appropriate jurisdictions and is able to conclude that it is more likely than not that its foreign deferred tax assets are realizable.

In July 2018, New Jersey enacted comprehensive corporate income tax reform legislation which included, among other items, the imposition of a multi-year temporary surtax, mandatory combined reporting starting in 2019, revised NOL and dividend exclusion rules, and decoupling from certain federal tax reform provisions. In October 2018 New Jersey enacted additional tax legislation that included significant technical corrections and clarifications to the July law as well as other substantive changes to the State’s corporate tax regime, and in December 2018 and January 2019 New Jersey issued technical guidance on combined reporting and New Jersey’s treatment of certain TCJA items such as GILTI income and related GILTI and foreign-derived income (“FDII”) special tax deductions, as well as the sourcing of GILTI and FDII, which were considerably different than the July 2018 tax reform law.

In the third quarter of 2018, under New Jersey’s July 2018 tax reform law as enacted, the Company recorded a discrete benefit of $11,437 to release valuation allowance against New Jersey NOLs and state net deferred tax assets against which the Company had previously maintained a full valuation allowance. The determination to release the valuation allowance was based on the impact and sourcing in future combined reporting of GILTI income without the related GILTI and FDII special deductions, which would have allowed the Company to use the entire New Jersey NOL before expiration.

The Company considers both positive and negative evidence related to the likelihood of realization of deferred tax assets. If, based on the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, the Company records a valuation allowance against all or a portion of the deferred tax assets to adjust the balance to the amount considered more likely than not to be realized. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified.

This assessment, which is completed on a taxing jurisdiction basis, takes into account a number of types of evidence, including the nature, frequency, and severity of current and cumulative financial reporting losses, sources of future taxable income, future reversals of existing taxable temporary differences, and prudent and feasible tax planning strategies, weighted by objectivity.

In the fourth quarter of 2018, the enactment of New Jersey’s October 2018 tax reform law and related guidance, which allows GILTI and FDII special tax deductions, and notably provides a separate apportionment methodology for sourcing net GILTI income to New Jersey, will result in no New Jersey tax of the Company’s net GILTI income and no utilization of the Company’s New Jersey NOLs for which the valuation allowance was released in the third quarter of 2018. Therefore, in the fourth quarter of 2018, the Company recorded a full valuation allowance against the New Jersey NOLs.

The domestic valuation allowance for the years ended December 31, 2018, 2017 and 2016 increased $722, $264 and $2,294, respectively. The 2018, 2017 and 2016 increases in the domestic valuation allowance are due to domestic state items.

The foreign valuation allowance for the years ended December 31, 2018, 2017 and 2016 decreased $283, increased $101, and decreased $698, respectively. The 2018 decrease in the foreign valuation allowance was allocated as follows: the valuation allowance decreased $246 for foreign income and decreased $37 for currency translation adjustments included in other comprehensive income (“OCI”). The 2017 increase in the foreign valuation allowance was allocated as follows: the valuation allowance increased $51 for foreign losses and increased $50 for currency translation adjustments included in OCI. The 2016 decrease in the foreign valuation allowance was allocated as follows: the valuation allowance decreased $621 for foreign income and decreased $77 for currency translation adjustments included in OCI.

Under the tax laws of the various jurisdictions in which the Company operates, NOLs may be carried forward or back, subject to statutory limitations, to reduce taxable income in future or prior years. Domestic federal and state NOLs acquired in the CHP stock acquisition are $5,266 and $8,576, respectively, and will expire in 2023 through 2036. The federal NOLs can be utilized against U.S. consolidated taxable income, subject to annual limitations. A full valuation allowance has been recorded against domestic state NOLs totaling approximately $129,198 as of December 31, 2018 which will expire in 2029 through 2038. A full valuation allowance has been recorded against foreign NOLs totaling approximately $1,588 which in most foreign jurisdictions will carry forward indefinitely.

Due in part to a continuing desire to limit credit and currency exposure for cash held in foreign currencies or in non-U.S. banks, the Company previously determined that it was likely that a portion of the undistributed earnings of its foreign subsidiaries would be repatriated to the U.S. in the future. Under TCJA’s transition to a modified territorial tax system whereby future repatriations of foreign earnings will generally be exempt from U.S. tax, it is likely that the Company will continue to repatriate certain foreign earnings in the future. Therefore, the Company will continue to monitor available evidence and its plans for foreign earnings and expects to continue to provide any applicable deferred taxes based on the tax liability or withholding taxes that would be due upon repatriation of amounts not considered permanently reinvested.

The following table summarizes the activity related to the Company’s unrecognized tax benefits as of December 31, 2018, 2017 and 2016:

	2018			2017			2016
Balance at January 1	$	1,654		$	1,778		$	1,492
Gross increases related to current period tax positions		210			215			687
Gross increases related to prior period tax positions		416			-			-
Gross decreases related to prior period tax positions		(37	)		(52	)		(84	)
Expirations of statute of limitations for the assessment of taxes		(233	)		(353	)		(257	)
Settlements		-			(134	)		-
Foreign currency translation		(67	)		200			(60	)
Balance at December 31	$	1,943		$	1,654		$	1,778

Of the total balance of unrecognized tax benefits at December 31, 2018, $1,943, if recognized, would affect the effective tax rate.

Gross interest and penalties at December 31, 2018, 2017, and 2016, of $455, $412, and $455, respectively, related to the above unrecognized tax benefits are not reflected in the table above. In 2018, 2017, and 2016, the Company accrued $99, $153, and $63, respectively, of interest and penalties in the income statement. Consistent with prior periods, the Company recognizes interest and penalties within its income tax provision.

Tax years 2012 and forward in the U.S. are open to examination by the IRS. The Company is also subject to examinations in its material non-U.S. jurisdictions for 2012 and later years.

The Company is also regularly subject to audits in various states for various years. Previous state audits have resulted in immaterial adjustments. In the majority of states where the Company files, the Company is subject to examination for tax years 2013 and forward.

In 2018 a state tax authority commenced an examination of the Company’s tax returns for 2014 and forward. The tax authority challenged the Company’s sourcing of income to the state, and accordingly the Company has recorded an increase to tax expense of $447. The Company is proceeding towards settlement discussions.