5. Income Taxes

The income tax provision as shown in the income statements includes the following:

(amounts in thousands)	Year Ended January 31, 2015			Year Ended February 1, 2014			Year Ended February 2, 2013
Current:
Federal	$	2,979		$	2,380		$	2,807
State		(363	)		305			397
Foreign		1,253			1,174			974

		3,869			3,859			4,178

Deferred:
Federal	$	630		$	(154	)	$	(83	)
State		17			(22	)		5

		647			(176	)		(78	)

Tax Expense (benefit) recorded as an increase (decrease) of paid-in capital:
Federal		182			(267	)		(57	)
State		16			(19	)		(4	)

		198			(286	)		(61	)

	$	4,714		$	3,397		$	4,039

A reconciliation of the actual income tax rates to the federal statutory rate follows:

	Year Ended January 31, 2015			Year Ended February 1, 2014			Year Ended February 2, 2013
Tax expense at U.S. statutory rate		34.0	%		34.0	%		34.0	%
State income taxes, net of federal income tax benefit		1.1			1.8			2.4
Adjustments to unrecognized tax benefits		(2.8	)		—			—
Nondeductible expenses		0.1			0.1			0.4
Other		—			—			0.3

Tax provision		32.4	%		35.9	%		37.1	%

A summary of deferred income tax assets is as follows:

	January 31, 2015					February 1, 2014
(amounts in thousands)	Current		Non-Current			Current		Non-Current
Deferred tax assets:
Amortization	$	—	$	—		$	—	$	168
Deferred revenue		—		6			—		28
Other		143		45			177		37
State income taxes		118		127			62		456
Compensation		151		1,536			—		1,383

Total deferred tax assets		412		1,714			239		2,072

Deferred tax liabilities:
Amortization		—		(658	)		—		—
Depreciation		—		(198	)		—		(394	)

Total deferred tax liabilities		—		(856	)		—		(394	)

Net deferred tax assets	$	412	$	858		$	239	$	1,678

Foreign taxes include withholding required on royalty payments from foreign jurisdictions. Deferred tax assets primarily relate to state tax benefits, and stock-based compensation. The Company believes that it is more likely than not that the deferred tax assets will be realized based upon expected future income.

The difference in the effective tax rate for Fiscal 2015 in comparison to Fiscal 2014 and Fiscal 2013 was primarily due to the recognition of previously unrecognized tax benefits upon the conclusion of income tax examinations during Fiscal 2015.

The amount of unrecognized tax benefits was approximately $450 and $1,000, respectively, at January 31, 2015 and February 1, 2014. At January 31, 2015, approximately $290 of unrecognized tax benefits would, if recognized, affect the effective tax rate. The Company has unrecognized tax benefits pertaining to the issue of its taxability in various state tax jurisdictions. It is reasonably possible that the amount of unrecognized tax benefits may decrease within the next 12 months as a result of the Company's interaction with these various state tax jurisdictions. The Company anticipates that the total amount of unrecognized tax benefits may decrease in the next 12 months by approximately $450. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(amounts in thousands)	Year Ended January 31, 2015			Year Ended February 1, 2014			Year Ended February 2, 2013
Gross unrecognized tax benefits at beginning of year	$	1,045		$	1,027		$	900
Additions:
Tax positions taken in prior years		105			10			273
Tax positions taken in the current year		57			22			24
Reductions:
Tax positions taken in prior years		(566	)		(13	)		(170	)
Tax positions taken in the current year		—			—			—
Settlement with taxing authorities		(192	)		—			—
Lapse in statute of limitations		—			(1	)		—

Gross unrecognized tax benefits at year end	$	449		$	1,045		$	1,027

In accordance with authoritative guidance, interest and penalties related to unrecognized tax benefits are included within the provision for taxes on the consolidated statements of income. The total amount of interest and penalties recognized in the consolidated statements of income for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively, was $(260), $60 and $100. As of January 31, 2015 and February 1, 2014, the total amount of accrued interest and penalties included in the Company's liability for unrecognized tax benefits was $80 and $300, respectively.

The Company files income tax returns in the U.S. federal and California and certain other state jurisdictions. For federal income tax purposes, the Fiscal 2012 and later tax years remain open for examination by the tax authorities under the normal three year statute of limitations. For state tax purposes, the Fiscal 2011 and later tax years remain open for examination by the tax authorities under a four year statute of limitations.