
F.	INCOME TAXES

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act included many changes to the U.S. tax code including reducing the U.S. federal corporate tax rate from 35.0% to 21.0% effective January 1, 2018. This change reduced the Company's effective tax rate for the fiscal year ended February 3, 2018, based on the 21.0% rate being in effect for one month of the fiscal year, and then further reduced the Company's effective tax rate for the full fiscal year ended February 2, 2019.

The provision for income taxes consists of:



	Fiscal Years Ended
	February 2, 2019			February 3, 2018			January 28, 2017
Current income tax expense:
Federal	$	27,278		$	46,158		$	55,541
State	4,857			3,960			6,029
Deferred income tax expense (benefit)	(1,099		)	(340		)	(3,260		)
Total	$	31,036		$	49,778		$	58,310

Total income tax expense for the year varies from the amount which would be provided by applying the statutory income tax rate to earnings before income taxes. The primary reasons for this difference (expressed as a percent of pre-tax income) are as follows:



	Fiscal Years Ended
	February 2, 2019		February 3, 2018		January 28, 2017

Statutory rate	21.0	%	33.7	%	35.0	%
State income tax effect	3.0		1.9		2.5
Tax exempt interest income	(0.2	)	(0.2	)	(0.1	)
Other	0.7		0.3		(0.1	)
Effective tax rate	24.5	%	35.7	%	37.3	%

Deferred income tax assets and liabilities are comprised of the following:



	February 2, 2019			February 3, 2018
Deferred income tax assets (liabilities):
Inventory	$	4,439		$	4,368
Stock-based compensation	1,918			2,432
Accrued compensation	3,451			4,006
Accrued store operating costs	3,023			2,899
Realized and unrealized loss on securities	(147		)	(270		)
Gift certificates redeemable	1,135			1,295
Deferred rent liability	7,015			8,744
Property and equipment	(15,004		)	(18,712		)
Net deferred income tax asset	$	5,830		$	4,762

As of February 2, 2019 and February 3, 2018, respectively, the net deferred income tax assets of $5,830 and $4,762 are classified in "other assets." There were no unrecognized tax benefits recorded in the Company’s consolidated financial statements as of February 2, 2019 or February 3, 2018. Fiscal years 2015 through 2018 remain subject to potential federal examination. Additionally, fiscal years 2014 through 2018 are subject to potential examination by various state taxing authorities.