INCOME TAXES.

The provision for income taxes consists of:



(in millions)	2018			2017		2016
Current income taxes
U.S. federal	$	484.2		$	708.1	$	573.7
State and local	138.7			131.0		105.8
Foreign	28.5			13.1		13.5
Deferred income taxes (benefits)	(35.5		)	71.7		13.5
Total	$	615.9		$	923.9	$	706.5

On December 22, 2017, the U.S. enacted a comprehensive tax reform bill. The Tax Reform included numerous changes to existing tax laws, including a permanent reduction in the federal corporate income tax rate. For the years ended December 31, 2018 and 2017, the income tax provision includes nonrecurring charges of $20.8 million and $71.1 million, respectively, related to the enactment of Tax Reform. As of December 31, 2018, we have completed our accounting for the income tax effects of Tax Reform.

On April 24, 2018, the state of Maryland enacted new state tax legislation. This new state tax legislation, effective in 2018, adopted a five-year phase-in of the single sales factor method of apportionment for calculating income tax for multi-state companies doing business in Maryland and is expected to result in a net benefit over time. We recognized a nonrecurring charge of $7.9 million during 2018 for the re-measurement of our deferred tax assets and liabilities to reflect the effect of this Maryland state tax legislation.

Deferred income taxes and benefits arise from temporary differences between taxable income for financial statement and income tax return purposes. The deferred income taxes (benefits) recognized as part of our provision for income taxes is related to:



(in millions)	2018			2017			2016
Property and equipment	$	11.0		$	(3.9	)	$	3.2
Stock-based compensation	7.1			72.4			1.3
Accrued compensation	(2.2		)	1.2			(1.7		)
Supplemental savings plan liability	(17.4		)	(8.3		)	(30.9		)
Asset impairments	.9			7.3			10.0
Unrealized holding gains recognized in non-operating income	(32.0		)	10.7			31.6
Other	(2.9		)	(7.7		)	—
Total deferred income taxes (benefits)	$	(35.5	)	$	71.7		$	13.5

The following table reconciles the statutory federal income tax rate to our effective income tax rate.



	2018		2017		2016
Statutory U.S. federal income tax rate	21.0	%	35.0	%	35.0	%
Impact of nonrecurring charge relating to U.S. tax reform	.8		2.9		—
Impact of nonrecurring charge related to Maryland state tax legislation	.3		—		—
State income taxes for current year, net of federal income tax benefits⁽¹⁾	4.6		3.9		3.8
Net income attributable to redeemable non-controlling interests	.7		(1.3	)	(.7	)
Net excess tax benefits from stock-based compensation plans activity	(1.7	)	(3.0	)	(1.7	)
Other items	.1		(.6	)	(.4	)
Effective income tax rate	25.8	%	36.9	%	36.0	%

⁽¹⁾State income tax benefits are reflected in the total benefits for net income attributable to redeemable non-controlling interests and stock-based compensation plans activity.

The net deferred tax assets recognized in our consolidated balance sheets in other assets as of December 31 relate to the following:



(in millions)	2018			2017
Deferred tax liabilities
Property and equipment	$	(46.3	)	$	(35.3	)
Net unrealized holding gains recognized in income	(30.1		)	(53.9		)
Net unrealized holding gains on investments held as available-for-sale	—			(3.1		)
Other	(20.4		)	(18.9		)
	(96.8		)	(111.2		)
Deferred tax assets
Stock-based compensation	85.6			92.7
Asset impairments	7.9			8.8
Accrued compensation	6.6			4.4
Supplemental savings plan	84.0			66.6
Currency translation adjustment	11.4			2.2
Other	11.2			6.8
	206.7			181.5
Net deferred tax asset	$	109.9		$	70.3

We have not recognized a state deferred tax liability for unremitted earnings of our foreign subsidiaries as T. Rowe Price intends to indefinitely reinvest these earnings outside the U.S. The unremitted earnings of these subsidiaries are estimated to be approximately $656 million at December 31, 2018. If these earnings were distributed to the U.S. in the form of dividends or otherwise, or if any of the entities were sold or otherwise transferred, we would be subject to state and local income taxes. Determination of the amount of the unrecognized deferred state liability related to these earnings is not practicable.

Other assets include tax refund receivables of $21.9 million at December 31, 2018, and $43.2 million at December 31, 2017.

Cash outflows from operating activities include net income taxes paid of $644.2 million in 2018, $857.7 million in 2017, and $680.6 million in 2016.

Additional income tax benefit arising from stock-based compensation plans activity totaling $40.6 million in 2018, $75.5 million in 2017, and $31.6 million in 2016 reduced the amount of income taxes that would have otherwise been payable. These income tax benefits were recognized in the income tax provision.

The following table summarizes the changes in our unrecognized tax benefits.



(in millions)	2018			2017			2016
Balance at beginning of year	$	7.6		$	6.2		$	5.8
Changes in tax positions related to
Current year	5.8			1.5			.6
Prior years	3.8			.1			—
Expired statute of limitations	(1.1		)	(.2		)	(.2		)
Balance at end of year	$	16.1		$	7.6		$	6.2

If recognized, these tax benefits would affect our effective tax rate; however, we do not expect that unrecognized tax benefits for tax positions taken with respect to 2018 and prior years will significantly change in 2019. The U.S. has concluded examinations related to federal tax obligations through the year 2016. A net interest payable related to our unrecognized tax benefits of $1.2 million at December 31, 2018, and $1.5 million at December 31, 2017, are recognized in our consolidated balance sheets. Our accounting policy with respect to interest and penalties arising from income tax settlements is to recognize them as part of our provision for income taxes. Interest recognized as part of our provision for income taxes was not material.