INCOME TAXES

The Company accounts for income taxes using ASC 740, “Income Taxes” which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized differently in the financial statements and the tax returns. The provision for income taxes consists of the following at December 31:



($ in thousands)	2014			2013			2012
Total provision:	$	2,697		$	2,086		$	2,723
Federal:
Current	$	2,289		(2,459		)	903
Deferred	(313		)	4,097			1,092
	1,976			1,638			1,995
State:
Current	603			231			67
Deferred	118			217			661
	721			448			728
	$	2,697		$	2,086		$	2,723

The reasons for the difference between total income tax expense and the amount computed by applying the statutory Federal income tax rate of 34% to income before taxes are as follows for the years ended December 31:



($ in thousands)	2014			2013			2012
Income tax at statutory rate	$	2,912		$	2,139		$	2,382
State income taxes, net of Federal benefit	452			307			472
Oil and mineral depletion	(385		)	(450		)	(620		)
Valuation allowance - land contribution	—			—			—
Other, net	(282		)	90			489
Total provision	$	2,697		$	2,086		$	2,723

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31:



($ in thousands)	2014		2013
Deferred income tax assets:
Accrued expenses	$	608	$	600
Deferred revenues	498		371
Capitalization of costs	2,746		2,151
Pension adjustment	4,502		2,923
Stock grant expense	2,936		2,660
State deferred taxes	200		2
Book deferred gains	1,711		1,416
Joint venture allocations	587		—
Provision for additional capitalized costs	1,003		1,003
Interest rate swap	954		—
Other	3		1,208
Total deferred income tax assets	$	15,748	$	12,334
Deferred income tax liabilities:
Deferred gains	$	1,390	$	1,390
Depreciation	4,228		3,495
Cost of sales allocations	1,252		1,252
Joint venture allocations	2,456		2,001
Straight line rent	947		1,006
Prepaid expenses	191		406
State deferred taxes	501		444
Other	207		296
Total deferred income tax liabilities	$	11,172	$	10,290
Net deferred income tax asset	$	4,576	$	2,044
Allowance for deferred tax assets	—		—
Net deferred taxes	$	4,576	$	2,044

The net current and non-current deferred tax assets for 2014 and 2013 are included separately on the face of the balance sheet. Due to the nature of most of our deferred tax assets, the Company believes they will be used through operations in future years and an allowance is not necessary.

During 2014 and 2013, the Company recognized certain net tax benefits related to stock option plans in the amount of $0 and $3,000, respectively. Such benefits were recorded as a reduction of income taxes payable and an increase in additional paid in capital.

The Company made total income tax payments of $1,100,000 in 2014 and $15,000 during 2013. The Company received federal refunds of $3,484,000 and $0 in 2014 and 2013, respectively.

The Company evaluates its tax positions for all income tax items based on their technical merits to determine whether each position satisfies the “more likely than not to be sustained upon examination” test. The tax benefits are then measured as the largest amount of benefit, determined on a cumulative basis, that is “more likely than not” to be realized upon ultimate settlement. As a result of the this evaluation, the Company determined there were no uncertain tax positions that required recognition and measurement for the years ended December 31, 2014 and 2013 within the scope of ASC 740, "Income Taxes." Tax years from 2011 to 2013 and 2010 to 2013 remain available for examination by the Federal and California State taxing authorities, respectively.