2. Income Taxes

Deferred Income Tax Liabilities and Assets – Deferred income taxes are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax laws and rates. Significant components of the Company’s deferred tax liabilities and assets are as follows:



	2017		2016
Deferred tax liabilities:
Property and equipment tax/book differences	$	89,089,000	$	88,465,000
Property tax method		1,575,000		1,501,000
Total deferred tax liabilities		90,664,000		89,966,000
Deferred tax assets:
Insurance reserves		7,872,000		8,390,000
Advance payments on purchases contracts		1,207,000		618,000
Vacation accrual		2,471,000		2,520,000
State tax credits		4,000		20,000
Inventory		1,555,000		1,720,000
Deferred compensation		5,032,000		4,062,000
Other		2,605,000		1,187,000
Total deferred tax assets		20,746,000		18,517,000
Net deferred tax liabilities	$	69,918,000	$	71,449,000

At September 24, 2016 refundable current income taxes totaling $2.0 million, are included in the line item “Other current assets” on the Consolidated Balance Sheets.

Income Tax Expense - Income tax expense differs from the amounts computed by applying the statutory federal rates to income before income taxes. The reasons for the differences are as follows:



	2017		2016		2015

Federal tax at statutory rate	$	29,492,000	$	29,622,000	$	33,060,000
State income tax, net of federal tax benefits		2,774,000		2,554,000		4,599,000
Federal tax credits		(1,024,000)		(1,312,000)		(1,544,000)
Other		(854,000)		(419,000)		(1,010,000)
Total	$	30,388,000	$	30,445,000	$	35,105,000

Current and deferred income tax expense (benefit) is as follows:



	2017		2016		2015

Current:
Federal	$	26,994,000	$	19,676,000	$	25,578,000
State		4,925,000		3,963,000		7,302,000
Total current		31,919,000		23,639,000		32,880,000
Deferred:
Federal		(1,104,000)		6,828,000		2,373,000
State		(427,000)		(22,000)		(148,000)
Total deferred		(1,531,000)		6,806,000		2,225,000
Total expense	$	30,388,000	$	30,445,000	$	35,105,000