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Income Taxes | 12 Months Ended
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May 31, 2017
Income Taxes |
6. | Income Taxes
Income before income taxes by source consists of the following amounts:
|  | Year ended May 31 |
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
U.S. |  | $ | 55,171 |  |  | $ | 50,662 |  |  | $ | 45,156 |
Foreign |  |  | 11,502 |  |  |  | 4,851 |  |  |  | 6,920 |
|  | $ | 66,673 |  |  | $ | 55,513 |  |  | $ | 52,076 |
The provision for income taxes consisted of the following:
|  | Year ended May 31 |
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Taxes |  | $ | 20,259 |  |  | $ | 14,630 |  |  | $ | 15,269 |
Foreign |  |  | 2,514 |  |  |  | 1,756 |  |  |  | 1,364 |
Deferred |  |  | (73 | ) |  |  | 2,589 |  |  |  | 1,867 |
|  | $ | 22,700 |  |  | $ | 18,975 |  |  | $ | 18,500 |
The reconciliation of income taxes computed at the U.S. federal statutory tax rate to income tax expense is as follows:
|  | Year ended May 31 |
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Tax at U.S. statutory rate |  | $ | 23,336 |  |  | $ | 19,429 |  |  | $ | 18,227 |
Section 199 domestic production deduction |  |  | (1,057 | ) |  |  | (1,143 | ) |  |  | (1,067 | )
Foreign rate differential |  |  | (1,247 | ) |  |  | (699 | ) |  |  | (949 | )
Subpart F income |  |  | 996 |  |  |  | 1,049 |  |  |  | 1,396 |
Tax credits and other |  |  | (300 | ) |  |  | 337 |  |  |  | 39 |
Provision for state income taxes, net of federal benefit |  |  | 972 |  |  |  | 779 |  |  |  | 854 |
Amended U.S. Federal tax returns FY12, FY13 & FY14 |  |  | — |  |  |  | (777 | ) |  |  | — |
|  | $ | 22,700 |  |  | $ | 18,975 |  |  | $ | 18,500 |
Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred income tax liabilities and assets are as follows:
|  | Year ended May 31 |
(in thousands) |  | 2017 |  |  | 2016 |
Deferred income tax liabilities |  |  |  |  |  |  |  |
Indefinite and long-lived assets |  | $ | (23,177 | ) |  | $ | (19,296 | )
Prepaid expenses |  |  | (640 | ) |  |  | (824 | )
Brazil valuation allowance |  |  | — |  |  |  | (542 | )
|  |  | (23,817 | ) |  |  | (20,662 | )
Deferred income tax assets |  |  |  |  |  |  |  |
Stock Options |  |  | 2,604 |  |  |  | 2,786 |
Inventories and accounts receivable |  |  | 2,603 |  |  |  | 2,076 |
Tax loss carryforwards |  |  | 436 |  |  |  | 813 |
Accrued expenses and other |  |  | 1,126 |  |  |  | 229 |
|  |  | 6,769 |  |  |  | 5,904 |
Net deferred income tax liabilities |  | $ | (17,048 | ) |  | $ | (14,758 | )
The Company had no accrual for unrecognized tax benefits at both May 31, 2017 and 2016. Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, such accruals will be reflected within income tax accounts. The Company is under audit by the Internal Revenue Service for tax years 2014-2016.

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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 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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