The following is a reconciliation of our effective tax rate to the federal statutory tax rate:

	Years Ended December 31,
	2020				2019				2018
United States federal statutory rate		21.0		%		21.0		%		21.0		%
Federal tax law changes		-				-				0.5
State taxes, net of federal benefit		3.6				3.5				3.7
Federal and state incentives		(1.1	)			(0.9	)			(0.9	)
State law changes		(0.2	)			0.7				-
Permanent differences		0.2				1.2				0.6
Net effective rate		23.5		%		25.5		%		24.9		%

	Years Ended December 31,
	2020		2019			2018
Current
Federal	$	11,913	$	31,209		$	(13,750	)
State and local		3,597		3,979			1,740
Foreign		11		84			(234	)
		15,521		35,272			(12,244	)

Deferred
Federal		6,548		(344	)		36,968
State and local		465		1,788			4,134
Foreign		7		(17	)		206
		7,020		1,427			41,308

Total provision	$	22,541	$	36,699		$	29,064

The following is a summary of our deferred tax assets and liabilities (in thousands):

	December 31,
	2020			2019
Accrued compensation		12,467			13,153
Other reserves		14,154			10,297
Tax credit carryforwards		8,715			6,669
Operating loss carryforwards		2,845			4,879
Lease accounting liability		11,669			10,195
Total gross deferred income taxes		49,850			45,193
Valuation allowances		(6,518	)		(4,713	)
Total deferred tax assets		43,332			40,480

Prepaids		(6,404	)		(4,774	)
Other receivables		-			(656	)
Property and equipment		(132,669	)		(124,964	)
Goodwill		(55,166	)		(55,195	)
Lease right-of-use asset		(11,418	)		(10,195	)
Total deferred tax liabilities		(205,657	)		(195,784	)

Total deferred taxes	$	(162,325	)	$	(155,304	)

We are subject to income taxation in the United States, numerous state jurisdictions, Mexico and Canada. Because income tax return formats vary among the states, we file both unitary and separate company state income tax returns. We do not permanently reinvest our foreign earnings, all amounts are accrued and accounted for, though not material.

We acquired a federal net operating loss carryforward of $4.1 million through the CaseStack Acquisition in December 2018. IRS loss limitation rules allowed us to utilize $1.3 million in both 2020 and 2019. The remaining net operating loss of $1.5 million has no expiration date. Our state tax net operating losses total $1.2 million. Some of those state losses have no expiration date while others will expire between December 31, 2021 and December 31, 2039. Management believes it is more likely than not that the loss carryforward deferred tax assets will be realized, except for fifty-five thousand dollars of state losses. A valuation allowance of fifty-five thousand dollars has been established.

Our federal incentive tax credit carryforward of $0.1 million expires between December 31, 2025 and December 31, 2028. Our state incentive tax credit carryforwards of $8.6 million expire between December 31, 2021 and December 31, 2025. Management believes it is more likely than not that the incentive carryforward deferred tax assets will be realized, except for $6.4 million of state tax credits. A valuation allowance of $6.4 million has been established.

As of December 31, 2020 and December 31, 2019, the amount of unrecognized tax benefits was $4.3 million and $4.1 million, respectively. Of these amounts, our income tax provision would decrease $3.7 million and $3.4 million, respectively, if recognized. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	2020			2019
Gross unrecognized tax benefits - beginning of the year	$	4,069		$	3,894
Gross (decreases) increases related to prior year tax positions		(52	)		74
Gross increases related to current year tax positions		1,484			506
Lapse of applicable statute of limitations		(1,209	)		(405	)
Gross unrecognized tax benefits - end of year	$	4,292		$	4,069

We estimate it is reasonably possible that our reserve could either increase or decrease by up to $1.0 million during the next twelve months.

We recognize interest expense and penalties related to income tax liabilities in our provision for income taxes. These amounts have been immaterial for the last three years.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was enacted in response to the coronavirus ("COVID-19") pandemic. Among other things, the CARES Act includes provisions related to refundable payroll tax credits, deferment of the employer portion of social security payments, net operating loss carryback periods, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. Though some

provisions of the CARES Act do impact the Company, there was no material effect on the Company’s consolidated financial condition or results of operations for the year ended December 31, 2020. On December 27, 2020, the Consolidated Appropriations Act (“CAA”) was enacted in further response to the COVID-19 pandemic, in combination with omnibus spending for the 2021 federal fiscal year. The CAA extended many of the provisions enacted by the CARES Act, the extension of which likewise did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2020.