Income Taxes

Income Tax Provision

The income tax provision was as follows (in millions):



Year Ended December 31,	2018		2017			2016
Current:
Federal	$	30.3	$	95.1		$	68.1
State	11.5		16.9			13.8
	41.8		112.0			81.9
Deferred:
Federal	20.4		(14.2		)	4.9
State	9.6		4.1			(0.4		)
	30.0		(10.1		)	4.5
Total	$	71.8	$	101.9		$	86.4

At December 31, 2018 and 2017, we had income taxes receivable of $17.1 million and $22.5 million, respectively, included as a component of other current assets in our Consolidated Balance Sheets.

The reconciliation between amounts computed using the federal income tax rate of 21% in 2018 and 35% in all other years and our income tax provision is shown in the following tabulation (in millions):



Year Ended December 31,	2018			2017			2016
Federal tax provision at statutory rate	$	70.9		$	121.5		$	99.2
State taxes, net of federal income tax benefit	16.1			13.3			10.8
Equity investment basis difference	—			—			9.5
Non-deductible items	1.5			1.3			1.4
Permanent differences related to stock-based compensation	(0.1		)	(0.8		)	0.1
Net change in valuation allowance	0.5			0.3			(5.1		)
General business credits	(1.1		)	(0.9		)	(28.0		)
Deferred revaluation for change in statutory tax rate	(15.8		)	(32.9		)	—
Other	(0.2		)	0.1			(1.5		)
Income tax provision	$	71.8		$	101.9		$	86.4

Deferred Taxes

Individually significant components of the deferred tax assets and (liabilities) are presented below (in millions):



December 31,	2018			2017
Deferred tax assets:
Deferred revenue and cancellation reserves	$	47.2		$	39.4
Allowances and accruals, including state NOL carryforward amounts	40.8			36.3
Credits and other	0.3			1.1
Valuation allowance	(1.1		)	(0.6		)
Total deferred tax assets	87.2			76.2

Deferred tax liabilities:
Inventories	(42.0		)	(20.9		)
Goodwill	(48.2		)	(35.0		)
Property and equipment, principally due to differences in depreciation	(78.0		)	(73.4		)
Prepaid expenses and other	(10.2		)	(3.2		)
Total deferred tax liabilities	(178.4		)	(132.5		)
Total	$	(91.2	)	$	(56.3	)

As noted at December 31, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) on December 22, 2017. The Tax Act makes broad and complex changes to the U.S. tax code including, but not limited to, reduction of the U.S. federal corporate income tax rate, expanded bonus depreciation provisions that will allow for full expensing of qualified property, a new limitation on the deductibility of business interest expense, and expanded limitations on the deductibility of executive compensation for covered individuals.

As of December 31, 2018, we have completed our accounting for the effects of Tax Act. As part of this process, we remeasured federal deferred tax assets and liabilities to reflect a change to the tax rate at which they are expected to reverse in the future, which is generally 21%. As of December 31, 2017, a provisional benefit of $32.9 million was recorded related to the remeasurement of our deferred tax balances. As of December 31, 2018, an additional $15.8 million benefit was recorded, which primarily relates to return to provision adjustments to our deferred tax balances as a result of changes to certain established tax accounting methods in 2018.

We consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment.

As of December 31, 2018, we had a $1.1 million valuation allowance recorded associated with our deferred tax assets. The entire allowance is associated with state net operating losses generated in current and previous years. The valuation allowance increased $0.5 million in the current year as a result of losses incurred, the benefits of which are not expected to be realized.

As of December 31, 2018, we had state net operating loss (NOL) carryforward amounts totaling approximately $3.0 million, tax effected, with expiration dates through 2038. We believe that it is more likely than not that the benefit from certain state NOL carryforward amounts will not be realized. In recognition of this risk, we have recorded a valuation allowance of $1.1 million on the deferred tax assets relating to these state NOL carryforwards. We had $0.4 million, tax effected, in state tax credit carryforwards with expiration dates through 2027. We believe it is more likely than not that the benefits from these state tax credit carryforwards will be realized.

Unrecognized Tax Benefits

We have no unrecognized tax benefits recorded as of December 31, 2018, 2017 and 2016.

Open tax years at December 31, 2018 included the following:



Federal	2015 - 2018
20 states	2014 - 2018