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)	2016			2015			2014
Total provision:	$	336		$	1,125		$	2,697
Federal:
Current	(758		)	1,521			2,289
Deferred	1,021			(682		)	(313		)
	263			839			1,976
State:
Current	(145		)	585			603
Deferred	218			(299		)	118
	73			286			721
	$	336		$	1,125		$	2,697

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)	2016			2015			2014
Income tax at statutory rate	$	304		$	1,360		$	2,912
State income taxes, net of Federal benefit	42			213			452
Oil and mineral depletion	(161		)	(213		)	(385		)
Permanent differences	82			(92		)	(172		)
Other	69			(143		)	(110		)
Total provision	$	336		$	1,125		$	2,697

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)	2016		2015
Deferred income tax assets:
Accrued expenses	$	561	$	578
Deferred revenues	654		652
Capitalization of costs	3,224		3,023
Pension adjustment	4,690		4,396
Stock grant expense	2,309		3,593
State deferred taxes	37		221
Book deferred gains	1,912		1,711
Joint venture allocations	932		860
Provision for additional capitalized costs	1,003		1,003
Interest rate swap	799		1,244
Other	41		3
Total deferred income tax assets	$	16,162	$	17,284
Deferred income tax liabilities:
Deferred gains	$	51	$	1,390
Depreciation	5,279		5,040
Cost of sales allocations	1,252		1,252
Joint venture allocations	5,389		3,121
Straight line rent	926		929
Prepaid expenses	323		149
State deferred taxes	470		617
Other	190		127
Total deferred income tax liabilities	$	13,880	$	12,625
Net deferred income tax asset	$	2,282	$	4,659
Allowance for deferred tax assets	—		—
Net deferred taxes	$	2,282	$	4,659

Due to the nature of our deferred tax assets, the Company believes they will be used through operations in future years and a valuation allowance is not necessary.

The Company made total federal and state income tax payments of $1,750,000 in 2016 and $2,100,000 during 2015. The Company received refunds of $615,000 and $283,000 in 2016 and 2015, 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 this evaluation, the Company determined there were no uncertain tax positions that required recognition and measurement for the years ended December 31, 2016 and 2015 within the scope of ASC 740, "Income Taxes." Tax years from 2014 to 2016 and 2013 to 2016 remain available for examination by the Federal and California State taxing authorities, respectively.