The reconciliation between our effective tax rate on net income and the federal statutory rate is as follows (dollars in thousands):


	Years ended December 31,
	2019					2018					2017
Income tax at federal statutory rate	$	19,447		21.0	%	$	15,159		21.0	%	$	19,537		35.0	%
Stock compensation		(255	)	(0.3	% )		(436	)	(0.6	%)		(581	)	(1.0	%)
Qualified Production Activity Deduction		—		0.0	%		—		0.0	%		(1,715	)	(3.1	%)
Other permanent items		737		0.8	%		(667	)	(0.8	%)		197		0.4	%
Change in valuation allowance		276		0.3	%		312		0.4	%		285		0.5	%
Change in uncertain tax positions		67		0.1	%		969		1.3	%		(1,807	)	(3.2	%)
State income taxes, net of federal benefit		4,174		4.5	%		2,911		4.0	%		2,150		3.8	%
Rate impact of the Tax Act		—		0.0	%		(810	)	(1.1	%)		(3,386	)	(6.1	%)

Total tax expense	$	24,446		26.4	%	$	17,438		24.2	%	$	14,680		26.3	%

Components of the net deferred tax asset or liability are as follows (in thousands):


	As of December 31,
	2019			2018
Deferred Tax Assets
Long-term
Accrued reserves and allowances	$	5,140		$	4,245
Allowance for doubtful accounts		514			500
Inventories		437			335
Property and equipment		303			—
Intangibles		5,615			4,937
Net operating loss carryforwards		1,240			1,446
Other		5			4

Long-term deferred tax assets		13,254			11,467
Less: Valuation allowance		(1,512	)		(1,255	)

Net deferred tax assets		11,742			10,212
Deferred Tax Liabilities
Long-term
Accrued reserves and allowances		(252	)		(365	)
Property and equipment		(4,176	)		(2,091	)
Intangibles		(4,307	)		(3,850	)
Investment in partnership		(11,857	)		(10,266	)
Other		(325	)		(242	)

Long-term deferred tax liabilities		(20,917	)		(16,814	)

Net deferred tax liabilities	$	(9,175	)	$	(6,602	)

As of December 31, 2019, we have recorded a deferred tax asset of $1.2 million reflecting the benefit of $5.4 million in federal and state income tax net operating loss (NOL) carryforwards, the earliest of which expires in 2030.

Valuation Allowance

We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets on a jurisdiction and by tax filing entity basis. A significant

piece of objective negative evidence evaluated is cumulative losses incurred over the most recent three-year period. Such objective evidence limits our ability to

consider

other subjective positive evidence such as our projections for future growth.

Based on this evaluation, a valuation allowance has been recorded as of December 31, 2019 and 2018 for the net deferred tax assets recorded on certain of our wholly owned subsidiaries. Such deferred tax assets relate primarily to net operating losses that are not more likely than not realizable. However, the amount of the deferred tax asset considered realizable could be adjusted if our estimate of future taxable income during the carryforward period changes, or if objective negative evidence in the form of cumulative losses is no longer present. Additional weight may be given to subjective evidence such as our projections for growth in this situation.

Uncertain Tax Positions

We are subject to taxation in the United States and various state jurisdictions. As of December 31, 2019, our tax years for

2016

through

2018

are subject to examination by the tax authorities. A rollforward of the gross unrecognized tax benefits is as follows (in thousands):


Unrecognized tax benefit, January 1, 2017	$	4,097
Increase as a result of tax positions taken during the period		4,353
Decrease as a result of tax positions taken during the period		(2,311	)
Decrease as a result of expiring statutes		(1,689	)

Unrecognized tax benefit, December 31, 2017	$	4,450


Increase as a result of tax positions taken during the period		3,846
Decrease as a result of tax positions taken during the period		(2,850	)
Decrease as a result of expiring statutes		(97	)

Unrecognized tax benefit, December 31, 2018	$	5,349


Increase as a result of tax positions taken during the perio d		2,866
Decrease as a result of tax positions taken during the period		(2,482	)
Decrease as a result of expiring statutes		(16	)

Unrecognized tax benefit, December 31, 2019	$	5,717

Unrecognized tax benefits of $2.8 million at December 31, 2019 would affect the effective tax rate. Interest expense and penalties accrued related to uncertain tax positions as of December 31, 2019 are $0.4 million.

We expect a decrease to the amount of unrecognized tax benefits (exclusive of penalties and interest) within the next twelve months of

zero

to $2.0 million.

Determining uncertain tax positions and the related estimated amounts requires judgment and carry estimation risk. If future tax law changes or interpretations should come to light, or additional information should become known, our conclusions regarding unrecognized tax benefits may change.