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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income tax expense were:
| 2014 |  | 2013 |  | 2012
Current: |  |  |  |  |
Federal | $ | 50 |  |  | (525 | ) |  | — |
State | (1,146 | ) |  | 3,093 |  |  | 3,305 |
Deferred: |  |  |  |  |
Federal | 28,493 |  |  | 11,743 |  |  | 12,114 |
State | (2,426 | ) |  | (176 | ) |  | 123 |
| $ | 24,971 |  |  | 14,135 |  |  | 15,542 |
The following table reconciles income tax expense to the amount computed by applying the federal statutory rate to income before income taxes of $76,777, $36,519 and $37,860 in 2014, 2013 and 2012:
| 2014 |  | 2013 |  | 2012
“Expected” federal income tax | $ | 26,872 |  |  | 12,782 |  |  | 13,251 |
Increase (decrease) in taxes attributable to: |  |  |  |  |
State taxes, net of federal income tax benefit | 4,155 |  |  | 1,836 |  |  | 2,108 |
Dividend received deduction | (46 | ) |  | (60 | ) |  | (59 | )
Uncertain tax positions | — |  |  | (650 | ) |  | 82 |
Sales & Use Enterprise Zone Credit | (880 | ) |  | — |  |  | — |
Tangible Property Regulations | (5,127 | ) |  | — |  |  | — |
Other items, net | (3 | ) |  | 227 |  |  | 160 |
| $ | 24,971 |  |  | 14,135 |  |  | 15,542 |
The components of the net deferred tax liability as of December 31 was as follows:
| 2014 |  | 2013
Deferred tax assets: |  |  |
Advances and contributions | $ | 16,212 |  |  | 15,598 |
Unamortized investment tax credit | 709 |  |  | 741 |
Pensions and postretirement benefits | 4,216 |  |  | 4,405 |
California franchise tax | — |  |  | 1,107 |
Net operating loss | 5,065 |  |  | 5,814 |
Other | 1,697 |  |  | 1,596 |
Total deferred tax assets | $ | 27,899 |  |  | 29,261 |
Deferred tax liabilities: |  |  |
Utility plant | $ | 150,662 |  |  | 125,706 |
Pension and postretirement benefits | 47,059 |  |  | 25,649 |
Investment in stock | 2,335 |  |  | 3,228 |
Deferred gain and other-property related | 11,695 |  |  | 13,107 |
Debt reacquisition costs | 443 |  |  | 496 |
Other | 1,211 |  |  | 1,811 |
Total deferred tax liabilities | $ | 213,405 |  |  | 169,997 |
Net deferred tax liabilities | $ | 185,506 |  |  | 140,736 |
Management evaluates the realizability of our deferred tax assets based on all available evidence, both positive and negative. The realization of deferred tax assets is dependent on our ability to generate sufficient future taxable income during periods in which the deferred tax assets are expected to reverse. Based on all available evidence, management believes it is more likely than not that SJW Corp. will realize the benefits of these deferred tax assets. As of December 31, 2014, the Company has a federal net operating loss carry forward of $14,051, which will expire in fiscal year 2031. This amount differs from the amount reported on the consolidated tax returns of $15,603 due to the adoption of ASU 2013-11 which provided explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists that can be utilized to offset unrecognized tax benefits. As of December 31, 2014, the Company has a state net operating loss carryforward of $1,659, which will expire in fiscal year 2034. The total amount of unrecognized tax benefits, before the impact of deductions for state taxes, excluding interest and penalties was $684 and $565 as of December 31, 2014 and 2013, respectively. The amount of tax benefits, net of any federal benefits for state taxes and inclusive of interest that would impact the effective rate, if recognized, is approximately $14 and $13 as of December 31, 2014 and 2013, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Balance at December 31, 2013 | $ | 535 |
Increase related to tax positions taken during a prior year, including interest | 118 |
Reductions related to tax positions taken in a prior year, including interest | (4 | )
Balance at December 31, 2014 | $ | 649 |
SJW Corp.'s policy is to classify interest and penalties associated with unrecognized tax benefits, if any, in tax expense. Accrued interest expense, net of the benefit of tax deductions which would be available on the payment of such interest, is approximately $14 as of December 31, 2014. SJW Corp. has not accrued any penalties for unrecognized tax benefits. The amount of interest recognized in 2014 was an expense of $1. SJW Corp. does not foresee material changes to its gross uncertain tax liability due to the lapse of the statute of limitations within the next 12 months following December 31, 2014. In the second quarter of 2014, SJW Corp. recorded $880 in State of California enterprise zone sales and use tax credits related to tax years 2008 through 2012. The California Franchise Tax Board selected the Company's fiscal year's 2008 through 2012 refund claims for examination. On September 13, 2013, the Department of Treasury and the Internal Revenue Service issued final tangible property regulations under provisions that generally are intended to simplify, clarify and make more administrable the 2011 temporary and proposed tangible property regulations. These regulations broadly apply to amounts to acquire, produce or improve tangible property, as well as dispositions of such property and provide criteria for determining whether such amounts can be deducted or should be capitalized as part of the asset. The final regulations generally are effective for tax years beginning on or after January 1, 2014. During the third quarter of 2014, management completed its evaluation of the capitalization elections under the new regulations in order to establish their method of complying with the new regulations and record the impact in the consolidated financial statements. To comply with the new regulations, SJW Corp. will apply the accounting method change in the 2014 tax returns for the expensing of certain utility asset improvement costs for tax purposes as of December 31, 2013 that were previously being capitalized for book and tax purposes. As of December 31, 2014, the 2014 federal and state repairs and maintenance deduction under the new methodology was $11,221, resulting in an estimated $3,927 Federal deferred tax liability and a state income tax benefit of $645. During the year ended December 31, 2014, SJW Corp. also completed a detailed analysis of the repairs and maintenance deduction related to 2013 and prior years, and recorded the estimated federal and state impact in the consolidated financial statements as of December 31, 2014. SJW Corp.'s Internal Revenue Code (“IRC”) §481(a) adjustment for Federal purposes was $35,912 and resulted in a $12,569 deferred tax liability as of December 31, 2014. SJW Corp.'s IRC §481(a) adjustment for state purposes was $77,999 and resulted in a $4,482 reduction to state income tax expense for the year ended December 31, 2014. SJW Corp. files U.S. federal income tax returns and income tax returns in various states. The Company is no longer subject to tax examination for fiscal years prior to 2012 for federal purposes and 2010 for state purposes. The open tax years for the jurisdictions in which SJW Corp. files are as follows:
Jurisdiction | Years Open
Federal | 2012 - 2013
California | 2010 - 2013
Arizona | 2010 - 2013
Connecticut | 2011 - 2013
Florida | 2011 - 2012
Tennessee | 2011 - 2013
Texas | 2010 - 2013

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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