Note E — Income Taxes

The income tax provision consisted of the following for the fiscal years ended March 31, 2015, 2016 and 2017:

	2015			2016			2017
Current — Federal	$	16,534,000		$	16,600,000		$	16,456,000
Current — State		136,000			2,591,000			2,834,000
Subtotal		16,670,000			19,191,000			19,290,000
Deferred — Federal		312,000			(1,679,000	)		(1,508,000	)
Deferred — State		(8,000	)		23,000			288,000
Subtotal		304,000			(1,656,000	)		(1,220,000	)
	$	16,974,000		$	17,535,000		$	18,070,000

The following is a reconciliation of the income tax provision from the statutory federal income tax rate to the effective rate for the fiscal years ended March 31, 2015, 2016 and 2017:

	2015			2016			2017
Income taxes at federal statutory rate (35%)	$	15,947,000		$	16,121,000		$	16,643,000
State income taxes, net of federal benefit		1,535,000			1,704,000			1,973,000
Uncertain tax positions		1,346,000			78,000			88,000
Permanent items and tax credits		94,000			(100,000	)		(705,000	)
Adjustments to returns as filed		(1,978,000	)		(232,000	)		80,000
Other		30,000			(36,000	)		(9,000	)
	$	16,974,000		$	17,535,000		$	18,070,000

Deferred tax assets and liabilities at March 31, 2016 and 2017 are:

	2016			2017
Deferred income tax assets:
Accrued liabilities not currently deductible	$	9,656,000		$	9,409,000
Allowance for doubtful accounts		696,000			1,153,000
Stock-based compensation		1,245,000			1,755,000
Accrued rent		1,875,000			2,219,000
Other		762,000			740,000
Deferred assets		14,234,000			15,276,000
Deferred income tax liabilities:
Excess of book over tax basis of fixed assets		(16,151,000	)		(15,666,000	)
Intangible assets		(5,555,000	)		(5,960,000	)
Other		(434,000	)		(336,000	)
Deferred liabilities		(22,140,000	)		(21,962,000	)
Net deferred tax liability	$	(7,906,000	)	$	(6,686,000	)

Prepaid expenses and taxes include $301,000 at March 31, 2016 and accounts and taxes payable include $584,000 at March 31, 2017, for income taxes due in the first quarter of the following fiscal year.

A reconciliation of the financial statement recognition and measurement of uncertain tax positions during the current fiscal year is as follows:

Balance as of March 31, 2016	$	1,830,000
Additions based on tax positions related to the current year		355,000
Additions for tax positions of prior years		—
Reductions for tax positions related to the current year		(177,000	)
Reductions for tax positions of prior years		(124,000	)
Balance as of March 31, 2017	$	1,884,000

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. During the years ended March 31, 2015, 2016 and 2017, the Company recognized approximately $57,000, $72,000 and $35,000 in interest and penalties, respectively. As of March 31, 2015, 2016 and 2017, accrued interest and penalties related to uncertain tax positions were $140,000, $212,000 and $247,000, respectively.

The tax fiscal years from 2013-2016 remain opened to examination by the major taxing jurisdictions to which the Company is subject.