Note 6 - Income taxes

Income tax expense (benefit) for the years ended December 31, 2016, 2015 and 2014 was $6.6 million, $2.9 million and ($0.9 million), respectively. The income tax expense (benefit) for each of the years ended December 31, 2016, 2015 and 2014 was for federal and state income tax at statutory rates applied to the pre-tax income (loss) for each of the periods.

The following summarizes the (benefit) / provision for income taxes:

Years Ended December 31,	2016		2015		2014
(in thousands)

Current:
Federal	$	4,981	$	174	$	0
State and local		567		2		(49)
		5,548		176		(49)
Deferred:
Federal		949		2,460		(767)
State and local		131		308		(90)
		1,080		2,768		(857)
Expense (benefit) for income taxes	$	6,628	$	2,944	$	(906)

Reconciliation of the Company's actual tax rate to the U.S. Federal statutory rate is as follows:

Years ended December 31,	2016			2015			2014
Income tax rates
- Statutory U.S. federal rate		35	%		34	%		34	%
- States, net U.S. benefits		3	%		4	%		4	%
- Tax benefit from prior year		0	%		0	%		18	%
Total		38	%		38	%		56	%

As of December 31, 2016, the Company had NOL's of approximately $5.4 million expiring through 2023, all of which are subject to annual limitations of $1.3 million.

Elements of deferred income tax assets (liabilities) are as follows:

December 31,	2016		2015
(in thousands)
Deferred tax assets (liabilities)
- Depreciation & amortization	$	(236)	$	(412)
- Reserves for doubtful accounts		139		127
- Inventory reserve		304		250
- Non qualified stock options		247		108
- NOL		2,078		3,430
- AMT credit carryforward		—		160
Total	$	2,532	$	3,663

As discussed above in Note 1, the Company elected to early adopt ASU 2015-17 prospectively in the fourth quarter of 2016. As a result, all deferred tax assets and liabilities have been presented as noncurrent on the consolidated balance sheet as of December 31, 2016.

The Company considered its projected future taxable income, and associated annual limitations, in determining the amount of deferred tax assets to recognize. The Company believes that given the extended time period that it may recognize its deferred tax assets, it is more likely than not it will realize the benefit of these assets prior to their expiration.