
	Year Ended March 31,
	2020		2019		2018
Domestic income before income taxes	$	138,537	$	128,035	$	138,290
Foreign income before income taxes	2,207		1,522		1,340
Total income before income taxes	$	140,744	$	129,557	$	139,630


	Year Ended March 31,
	2020		2019		2018
Current:
Federal	$	4,885	$	7,163	$	8,001
State and local	754		1,269		1,769
Foreign	400		463		580
Total current income tax expense	$	6,039	$	8,895	$	10,350
Deferred:
Federal	$	6,589	$	3,654	$	24,180
State and local	1,315		17,917		(496)
Foreign	25		94		(701)
Total deferred income tax expense	7,929		21,665		22,983
Total income tax expense	$	13,968	$	30,560	$	33,333

A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate is as follows:


	Year Ended March 31,
	2020		2019		2018
Federal tax at statutory rate	21.0	%	21.0	%	31.6	%
State income taxes, net of federal benefit	1.7	%	1.4	%	1.5	%
Non-controlling interest	(9.8)	%	(10.8)	%	(19.8)	%
Foreign income taxes	—	%	—	%	(0.4)	%
Valuation allowance	(0.9)	%	1.9	%	(1.6)	%
Tax reform impact	—	%	—	%	13.7	%
Deferred tax asset state apportionment changes	—	%	10.3	%	—	%
Other	(2.1)	%	(0.2)	%	(1.1)	%
Effective tax rate	9.9	%	23.6	%	23.9	%


	Year Ended March 31,
	2020		2019
Deferred tax assets:
Basis difference in HLA	$	150,309	$	126,219
Tax Receivable Agreement	24,020		16,652
Fixed assets	42		26
Net operating loss carryforwards	1,569		1,843
Valuation allowance	(37,969)		(37,164)
State taxes	(30)		150
Total deferred tax assets	$	137,941	$	107,726

As of March 31, 2020 and 2019, the Company had net operating loss carryforwards of $6,902 and $7,999 that were generated from certain foreign subsidiaries. These net operating losses can be carried forward indefinitely. As of March 31, 2020 and 2019, it is more likely than not that the tax benefits from certain of these net operating loss carryforwards will not be realized, therefore, a valuation allowance of $768 and $947 has been established, respectively.

In connection with the September 2019 Offering and unit exchange, the Company recorded a deferred tax asset in the amount of $37,394, which is net of a valuation allowance of $3,736 related to the portion of tax benefits that it is more likely than not will not be realized. Additionally, in connection with the September 2019 Offering and unit exchange and recording of the deferred tax asset, the Company recorded a payable to related parties pursuant to the tax receivable agreement of $31,481.

The Company believes it is more likely than not that the deferred tax assets (except those identified above) will be realized based on the Company’s historic earnings, forecasted income, and the reversal of temporary differences. The net change in the valuation allowance was an increase of $805, which was recorded through additional paid-in-capital and income tax expense.

As of March 31, 2020, 2019, and 2018, the Company had no unrecognized tax positions. The Company does not expect any material increase or decrease in its gross unrecognized tax positions during

the next twelve months. If and when the Company does record unrecognized tax positions in the future, any interest and penalties related to unrecognized tax positions will be recorded in the income tax expense line in the Consolidated Statements of Income.

The Company files income tax returns as required by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company may be subject to examination by federal and certain state and local tax authorities. As of March 31, 2020, the Company’s income tax returns from 2016 remain open and are subject to examination.

The Company has recorded a liability related to the TRA of $98,956 and $69,636 as of March 31, 2020 and 2019. A payment of $1,952 was made during the year ended March 31, 2020. In the event that the valuation allowance related to tax benefits associated with the tax receivable agreement is released in a future period, an additional estimated payable will be due to the TRA Recipients of $10,589.