(7)	INCOME TAX

The income tax provision (benefit) on income from operations consists of the following:

	Years ended December 31,
	2015			2014			2013
Current:
Federal	$	44,841		$	34,504		$	25,625
State		6,670			4,827			2,590
		51,511			39,331			28,215
Deferred		(7,956	)		(3,804	)		(1,497	)
	$	43,555		$	35,527		$	26,718

Reconciliation of the U.S. statutory income tax rate to our effective income tax expense rate for operations follows:

	Years ended December 31,
	2015			2014			2013
Federal income tax expense at statutory rate	$	37,949		$	33,064		$	23,037
State income tax, net of federal income tax benefit		3,715			2,867			2,371
Non-deductible business expenses		2,414			1,485			1,110
Qualified manufacturing activities		(466	)		(1,720	)		—
Other, net		(57	)		(169	)		200
	$	43,555		$	35,527		$	26,718

The tax effects of the major items recorded as deferred tax assets and liabilities as of December 31 are:

	2015			2014
Deferred income tax assets:
Operating expenses not currently deductible	$	9,953		$	9,093
Stock option and other employee benefit plans		13,504			9,815
Capital loss and credit carryforward		179			177
Property and equipment		—			46
Total deferred income tax assets		23,636			19,131
Deferred income tax liabilities:
Intangible assets		(111,653	)		(13,424	)
Property and equipment		(2,781	)		—
Other		(228	)		(203	)
Total deferred income tax liabilities		(114,662	)		(13,627	)
Net deferred income tax (liability) asset	$	(91,026	)	$	5,504

In 2014, we utilized approximately $650,000 of net operating loss carryforwards for federal income tax reporting purposes. The full amount of the net operating loss utilized was attributable to excess tax benefits related to share-based arrangements for which authoritative guidance prohibited the recognition of a deferred tax asset in 2013. In 2014, this tax benefit was accounted for as an increase to shareholders’ equity and a reduction in income tax payable. In total, we recognized approximately $45.3 million and $19.4 million of excess tax benefits related to share-based arrangements in 2015 and 2014, respectively, as a credit to shareholders’ equity and a reduction in income taxes payable.

Although realization is not assured, we believe it is more likely than not that all the deferred tax assets at December 31, 2015 and 2014 will be realized. Accordingly, we believe no valuation allowance is required for the deferred tax assets. However, the amount of the deferred tax asset considered realizable could be adjusted in the future if estimates of reversing taxable temporary differences are revised.

The Internal Revenue Service (“IRS”) is examining our U.S. income tax return for the year 2012. In addition, there is one open state audit for the year 2011. As of February 22, 2016, no significant adjustments have been proposed by the IRS. We are unable to make a reasonable estimate as to when cash settlements, if any, will occur.

We are subject to U.S. federal tax as well as income tax of multiple state and local jurisdictions. We are no longer subject to United States federal income tax examinations for years before 2012. We are no longer subject to state and local income tax examinations by tax authorities for the years before 2011.

We paid income taxes, net of refunds received, of $27.3 million in 2015, $10.2 million in 2014, and $9.3 million in 2013.