
	Year Ended December 31,
	2019		2018		2017
Current:
Federal	$	6,426	$	8,844	$	14,020
State	412		1,317		379
	6,838		10,161		14,399
Deferred:
Federal	352		55		(3,764)
State	(46)		1,480		300
	306		1,535		(3,464)
Total	$	7,144	$	11,696	$	10,935

Income tax expense also included tax expense allocated to comprehensive income for 2019, 2018, and 2017 of $14, $73, and $37, respectively (see the Consolidated Statements of Comprehensive Income).

On December 22, 2017, the United States enacted tax reform legislation commonly known as the Tax Act, resulting in significant modifications to the then existing law, impacting the measurement of income taxes for the year ended December 31, 2017, and the years thereafter. The Company recorded a discrete net tax benefit in its Consolidated Statement of Income through net income of $3,343 in the year ended December 31, 2017. This net benefit was driven by a re-measurement of the carrying value of its deferred tax assets and liabilities because of the corporate rate reduction. This net benefit provided a 6.3 percent reduction in the Company’s effective tax rate for the year ended December 31, 2017.

A reconciliation of income tax expense at the normal statutory federal rate to income tax expense included in the accompanying Consolidated Statements of Income is below:


	Year Ended December 31,
	2019			2018			2017
"Expected" provision at federal statutory rate	$	9,654		$	10,286		$	18,465
State income taxes, net^(a)	1,540			2,029			1,612
Change in valuation allowance	(168)			1,304			(578)
Domestic production activity deduction	—			—			(957)
Share-based compensation^(a)	(2,877)			(1,201)			(4,254)
Compensation limits	148			—			931
Federal and state tax credits	(1,302)			(807)			(1,058)
Tax benefit from the Tax Act	—			—			(3,343)
Other	149			85			117
Income tax expense	$	7,144		$	11,696		$	10,935
Effective tax rate	15.6		%	23.9		%	20.7		%

(a)The Company received federal excess tax benefits on share-based compensation awards in 2019, 2018, and 2017 of $2,877, $1,201, and $4,254, respectively, and state benefits of $459, $236 and $371, respectively, for excess tax benefits. The state benefits are part of the State income taxes, net, balances in the above table. Tax benefits from share-based compensation may be substantially less in future years, and in certain instances can create tax determinant.


	December 31,
	2019		2018
Deferred income tax assets:
Post-retirement liability	$	717	$	770
Deferred income	300		393
Share-based compensation	1,238		1,581
Capital loss carryforwards	91		379
State tax credit carryforwards	3,198		3,245
State operating loss carryforwards	1,529		1,505
Inventories	1,738		1,476
Operating lease liabilities	1,582		—
Other	1,291		1,231
Gross deferred income tax assets	11,684		10,580
Less: valuation allowance	(1,284)		(1,452)
Net deferred income tax assets	10,400		9,128
Deferred income tax liabilities:
Fixed assets	(10,332)		(10,497)
Operating lease right-of-use assets	(1,577)		—
Other	(420)		(308)
Gross deferred income tax liabilities	(12,329)		(10,805)
Net deferred income tax liability	$	(1,929)	$	(1,677)

As of December 31, 2019 and 2018, the Company’s total valuation allowance of $1,284 and $1,452, respectively, related to net operating loss carryforwards in states in which it is not "more likely than not" to create enough state taxable income to fully utilize the carryforwards before expiration of the carryforward periods, and capital loss carryforwards that the Company is not "more likely than not" to use before they expire. The reduction of the valuation allowance year over year is due to certain capital loss carryforwards and corresponding deferred tax asset related valuation allowance that expired at the end of 2019.

As of December 31, 2019 and 2018, the Company had $21,918 and $21,575 in gross state net operating loss carryforwards, respectively. Due to varying state carryforward periods, the state net operating loss carryforwards will expire in varying years between calendar years 2020 and 2039. As of December 31, 2019 and 2018, the Company had gross state tax credit carryforwards of $4,049 and $4,107, respectively. State credits, if not used to offset income tax expense in their respective jurisdictions, will expire in varying years between 2020 and 2035.

The Company treats accrued interest and penalties related to tax liabilities, if any, as a component of income tax expense. During 2019, 2018, and 2017, the Company's activity in accrued interest and penalties was not significant.


	Year Ended December 31,
	2019		2018		2017
Beginning of year balance	$	193	$	185	$	43
Additions based on prior year tax positions	3		2		130
Additions based on current year tax positions	78		11		12
Reduction for prior year tax positions	(19)		(5)		—

End of year balance	$	255	$	193	$	185

For each period presented, substantially all of the amount of unrecognized benefits (excluding interest and penalties) would impact the effective tax rate, if recognized. The Company reasonably expects that the amount of unrecognized tax benefit will decrease by approximately half of its value over the next 12 months due to the statute of limitations expiring for unrecognized tax benefits related to the tax year ending 2016. The recognized tax benefit related to this decrease may be less than the gross activity due to audit adjustments.

The Company is currently under federal income tax audit for tax year 2016. The Company does not expect this audit to result in a significant adjustment. For federal tax purpose, all tax years after 2015 remain open to adjustment. The Company is subject to examination for its state returns for year 2015, and forward, with the exception of certain net operating losses and credit carryforwards originating in years prior to 2015 that remain subject to adjustment.