8.	Income Taxes

The components of the income tax provision (benefit) are as follows:


(in thousands)	2016			2015			2014
Current:
Federal	$	61,251		$	55,140		$	48,293
State		5,948			3,578			2,882

		67,199			58,718			51,175

Deferred:
Federal		(4,563	)		(4,874	)		(597	)
State		(325	)		(232	)		(35	)

		(4,888	)		(5,106	)		(632	)

Total	$	62,311		$	53,612		$	50,543

The following is a reconciliation of income taxes at the statutory tax rate to the Company’s effective tax rate:


	2016			2015			2014
Federal taxes at statutory rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal tax benefit		2.2			1.8			1.2
Research and development tax credit		(0.2	)		(0.2	)		(0.4	)
Other		—			0.1			0.2

Effective tax rate		37.0	%		36.7	%		36.0	%

At December 31, 2016, we had $3.6 million of unrecognized tax benefits, $2.5 million of which would affect our effective tax rate if recognized.

The following table summarizes the change in uncertain tax benefits for the three years ended December 31, 2016:


(in thousands)	2016			2015			2014
Balance at beginning of year	$	1,855		$	1,163		$	1,201
Reductions due to lapses in statutes of limitations		—			—			(301	)
Reductions due to tax positions settled		(109	)		(177	)		—
Reductions due to reversals of prior year positions		(212	)		(20	)		(38	)
Additions based on tax positions taken during the current period		2,033			889			301

Balance at end of year	$	3,567		$	1,855		$	1,163

We recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2016, we had approximately $0.2 million of accrued interest related to uncertain tax positions.

Deferred income taxes result from timing differences in the recognition of revenue and expense for tax and financial statement purposes. The sources of temporary differences are as follows:


(in thousands)	December 31, 2016		December 26, 2015
Assets:
Inventories	$	10,337	$	8,685
Accounts receivable		20,216		18,954
Accrued expenses		2,935		2,435
Other		786		214

Gross deferred tax assets		34,274		30,288

Liabilities:
Depreciation		11,988		13,207
Goodwill and intangible assets		9,857		9,524

Gross deferred tax liabilities		21,845		22,731

Net deferred tax assets	$	12,429	$	7,557

Based on our history of taxable income and our projection of future earnings, we believe that it is more likely than not that sufficient taxable income will be generated in the foreseeable future to realize the remaining net deferred tax assets.

We file income tax returns in the United States, China and Mexico. All years before 2013 are closed for federal tax purposes. We are currently under examination by one state tax authority for years 2011-2012. Tax years before 2011 are closed for the remaining states in which we file. We filed tax returns in Sweden through 2012 and all years prior to 2009 are closed. It is reasonably possible that audit settlements, the conclusion of current examinations or the expiration of the statute of limitations could impact the Company’s unrecognized tax benefits.