5. INCOME TAXES

The provision for income taxes is summarized below:

	2015			2014			2013
Current expense:
Federal	$	2,692		$	893		$	1,080
State		39			175			333
Total current income tax expense		2,731			1,068			1,413
Deferred		(4,432	)		2,560			2,063
Change in valuation allowance		1,278			(318	)		318
Total deferred income tax expense		(3,154	)		2,242			2,381
Total income tax expense	$	(423	)	$	3,310		$	3,794

The consolidated effective tax rates differ from the federal statutory rates as follows:

	2015			2014			2013
Statutory federal rate		35.0	%		35.0	%		35.0	%
State income taxes after federal income tax		0.4			5.0			9.3
Valuation allowance		5.7			(2.3	)		2.6
Accounting for Stock Options		2.1			1.9			2.7
Research & Development credit		(43.5	)		—			—
Uncertain tax position expense		1.9			—			—
Other		(4.6	)		(2.6	)		(1.4	)
Consolidated effective tax rate		(3.0	)%		37.0	%		48.2	%

The following is an analysis of accumulated deferred income taxes:

	2015			2014
Assets:
Current:
Bad debts	$	178		$	127
Employee benefit accruals		102			251
Environmental reserves		864			(125	)
Inventory		1,353			1,158
State taxes		1,699			1,812
Alternative minimum tax credit carryforward		518			130
Research & Development credit		2,717			—
Warranty		122			—
Valuation allowance		(453	)		—
Other		1,039			1,255
Total current		8,139			4,608
Noncurrent:
Bad debts		1,062			1,062
Employee benefit accruals		228			396
Environmental reserves		2,648			3,352
Inventory		(356	)		—
Research & Development credit		1,669			—
Property		(340	)		(348	)
Valuation allowance		(1,090	)		(265	)
Total noncurrent		3,821			4,197
Total net assets	$	11,960		$	8,805

The Company has an Alternative Minimum Tax Credit of approximately $518 and is available to reduce future federal taxes. In addition, the Company has Research & Development tax credit carryforward at the federal and state level of $2,620 and $1,767 respectively that is available to reduce federal and state taxes. A valuation allowance of $1,543 exists relating to the state tax credits and other items, as it is management’s belief that it is more likely than not that a portion of these deferred assets are not realizable.

In fiscal 2014 the Company’s effective tax rate decreased primarily due to a reduction of state deferred taxes and the impact from various state tax rate adjustments. In fiscal 2015, the Company’s effective tax rate was reduced primarily as a result of the research & development tax credit. A valuation allowance was also recorded in fiscal 2015 of $1,278 relating to state tax carryforwards that have been determined to be not more likely than not realizable.

The Company performed a qualitative and quantitative analysis of the available federal and state research and development tax credit in order to determine the amount of previously unclaimed credits. The Company recorded a net benefit associated with recognition of the federal and state research and experimental tax credit of $6,293, as reflected in the current fiscal year income tax benefit. With the recognition of the benefit, the Company also recorded a liability relating to uncertain tax positions of $255.

Unrecognized Tax Benefits

A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows:

	2015			2014		2013
Balance April 1		—			—		—
Increase based on tax positions taken during a prior tax period		(249	)		—		—
Increase based on tax positions taken during the current tax period		(43	)		—		—
Balance March 31		(292	)		—		—

At March 31, 2015, the Company does not expect the liability for uncertain tax positions to change in the next twelve months. The entire amount would be a benefit to the tax expense in the period in which the liability is reduced.

The Company is subject to taxation in the United States and various states and foreign jurisdictions. The Company’s tax years for fiscal 2012 through the present are subject to examination by the tax authorities. With few exceptions, the Company is no longer subject to United States federal, state, local or foreign examinations by tax authorities for years before fiscal 2012.

The Company policy is to recognize interest and penalties, related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties, if incurred, are included within the related tax liability line in the consolidated balance sheets. During 2015, we recognized a net after tax expense in the income statement related to interest of approximately $14. We had approximately $14 (after-tax) for the payment of interest accrued in the consolidated balance sheets as of March 31, 2015.