8. INCOME TAXES:

The components of income tax expense from operations for fiscal 2015 and fiscal 2014 consisted of the following:

	2015		2014
Current: Federal	$	3,650,491	$	2,802,495
Current: State		486,173		446,546

		4,136,664		3,249,041

Deferred: Federal		242,502		351,327
Deferred: State		21,834		31,632

		264,336		382,959

Income tax expense	$	4,401,000	$	3,632,000

The difference between the Company's income tax expense in the accompanying consolidated financial statements and that which would be calculated using the statutory income tax rate of 35% for both fiscal 2015 and fiscal 2014 on income before income taxes is as follows:

	2015			2014
Tax at statutory rate	$	3,766,798		$	3,007,036
Nondeductible business expenses		355,710			327,665
State income taxes, net of federal tax benefit		347,157			306,014
Other		(68,665	)		(8,715	)

	$	4,401,000		$	3,632,000

Temporary differences between the financial statement carrying balances and tax basis of assets and liabilities giving rise to the net deferred tax asset (liabilities) at fiscal year ends 2015 and 2014 relate to the following:

	2015			2014
Deferred tax assets:
Current:
Allowance for doubtful accounts	$	319,818		$	289,670
Accrued expenses		1,076,222			1,223,381
Inventory		523,396			446,554

		1,919,436			1,959,605
Noncurrent:
Property and equipment	$	180,285		$	139,106
Net operating loss carry forwards—federal		287,759			333,800
Net operating loss carry forwards—state		596,545			596,545

		1,064,589			1,069,451

Total deferred tax assets		2,984,025			3,029,056
Valuation allowance		(586,299	)		(586,299	)

Net deferred tax assets	$	2,397,726		$	2,442,757


Deferred tax liabilities:
Current:
Trade discounts	$	365,710		$	353,437
Noncurrent:
Property and equipment		1,531,346			1,391,625
Goodwill		1,246,782			1,153,863
Intangible assets		1,396,260			1,421,868

		4,174,388			3,967,356

Total deferred tax liabilities	$	4,540,098		$	4,320,793


Net deferred tax assets (liabilities):
Current	$	1,553,726		$	1,606,168
Noncurrent		(3,696,098	)		(3,484,204	)

	$	(2,142,372	)	$	(1,878,036	)

At September 2015, the Company had a $0.3 million noncurrent deferred tax asset related to federal net operating loss carryforwards. These federal net operating loss carryforwards totaled approximately $0.8 million and were primarily attributable to the Company's fiscal 2002 purchase of Hawaiian Natural Water Company, Inc. ("HNWC"), a wholly owned subsidiary of the Company. The utilization of HNWC's net operating losses is limited by Internal Revenue Code Section 382 to approximately $0.1 million per year through 2022.

At September 2015, the Company had a valuation allowance of approximately $0.6 million against certain state net operating losses, which more likely than not will not be utilized. The Company had no material unrecognized tax benefits, interest, or penalties during either fiscal 2015 or fiscal 2014, and the Company does not anticipate any such items during the next twelve months. The Company's policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Operations. The Company files income tax returns in the U.S. and various states and the tax years 2012 and forward remain open under U.S. and state statutes.