Income Taxes

The Company’s corporate organizational structure requires the filing of two separate consolidated U.S. Federal income tax returns. Taxable income of one group cannot be offset by tax attributes, including net operating losses, of the other group.

A reconciliation of the effective tax rate to the U.S. federal statutory tax rate is as follows:



	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
Federal statutory tax rate	35.0	%	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	1.8		3.6		2.1		3.2
Return to accrual adjustments	(4.9	)	1.1		(1.8	)	0.4
Domestic production activities deduction	(1.9	)	(2.3	)	(2.4	)	(2.4	)
Other	(0.2	)	1.2		0.1		0.5
Effective income tax rate	29.8	%	38.6	%	33.0	%	36.7	%

Fluctuations in effective tax rates were historically impacted by permanent tax differences with no associated income tax impact and existing deferred tax asset valuation allowances. The return to accrual adjustments for the three and nine months ended September 30, 2014 include the effect of a decrease in deferred tax liabilities related to a change in state tax apportionment.

Deferred taxes are presented in the balance sheets as follows (in thousands):



	September 30, 2014			December 31, 2013
Current deferred tax assets	$	2,840		$	2,522
Non-current deferred tax assets	14,090			15,012
Non-current deferred tax liabilities	(26,048		)	(27,575		)
Net deferred tax assets (liabilities)	$	(9,118	)	$	(10,041	)

During the three months ended September 30, 2014, the Company recorded a final adjustment related to the acquisition of Florida Chemical that increased current deferred tax assets by $1.2 million (see Note 3).