4. Income Taxes

The components of the provision for income taxes are as follows:



	Year ended December 31,
	2015		2014		2013
Current tax:
U.S. Federal	$	244,470	$	248,219	$	165,731
U.S. State		37,957		41,225		39,136
Foreign		172		156		63
		282,599		289,600		204,930
Deferred tax:
U.S. Federal		11,000		(13,890)		5,238
U.S. State		699		(6,740)		(3,105)
Foreign		(2,288)		(3,075)		(1,330)
		9,411		(23,705)		803
Valuation allowance		2,255		3,034		1,300
Provision for income taxes	$	294,265	$	268,929	$	207,033

Actual taxes paid for each tax period were less than the current tax expense due to the excess tax benefit on stock-based compensation of $74,442, $21,667, and $38,379 during the years ended December 31, 2015, 2014, and 2013, respectively.

The effective tax rate differs from the statutory tax rates as follows:



	Year ended December 31,
	2015		2014		2013
Statutory U.S. federal income tax rate	35.0	%	35.0	%	35.0	%
State income tax, net of related federal income tax benefit	3.6		3.7		4.2
Other	(0.4)		(1.1)		(0.5)
Effective income tax rate	38.2	%	37.6	%	38.7	%

In 2015 and 2014, the effective tax rate was lower than 2013 because there was a decrease in the state tax rate. Additionally, 2014 included a benefit from filing the 2013 tax returns, which included a non-recurring change in the estimate of usable employer credits.

Deferred income tax liabilities are taxes the Company expects to pay in future periods. Similarly, deferred income tax assets are recorded for expected reductions in taxes payable in future periods. Deferred income taxes arise because of the differences in the book and tax bases of certain assets and liabilities. Deferred income tax liabilities and assets consist of the following:



	December 31,
	2015		2014
			(as adjusted)
Long-term deferred income tax liability:
Leasehold improvements, property and equipment	$	192,125	$	175,808
Goodwill and other assets		1,696		1,519
Prepaid assets and other		8,297		6,091
Total long-term deferred income tax liability		202,118		183,418
Long-term deferred income tax asset:
Deferred rent		57,716		52,147
Gift card liability		3,171		1,451
Capitalized transaction costs		502		503
Stock-based compensation and other employee benefits		83,058		87,713
Foreign net operating loss carry-forwards		11,407		8,618
State credits		4,783		4,281
Allowances, reserves and other		18,577		14,656
Valuation allowance		(9,401)		(7,512)
Total long-term deferred income tax asset		169,813		161,857
Net long-term deferred income tax liability	$	32,305	$	21,561

As described in Note 1, the Company elected to early adopt FASB guidance ASU 2015-17 “Income Taxes” as of December 31, 2015 and to apply the guidance retrospectively to all periods presented related to the classification of current and noncurrent deferred tax assets and liabilities. Accordingly, the Company reclassified the prior period amount of $18,968 related to its net deferred tax asset from current to noncurrent, resulting in an offset to the noncurrent deferred income tax liability for the same amount for that period.

The unrecognized tax benefits are as follows:



	2015		2014		2013
Beginning of year		1,342		-		-
Increase resulting from prior year tax position		402		-		-
Increase resulting from current year tax position		2,032		1,342		-
End of year	$	3,776	$	1,342	$	-

The Company is open to federal and state tax audits until the applicable statutes of limitations expire. Tax audits by their very nature are often complex and can require several years to complete. The Company is no longer subject to U.S. federal tax examinations by tax authorities for tax years before 2012. For the majority of states where the Company has a significant presence, it is no longer subject to tax examinations by tax authorities for tax years before 2012. Some of the Company’s foreign net operating losses began expiring in 2015.