NOTE F — INCOME TAXES

The income tax provision is comprised of the following:


	Year Ended January 31,
	2013			2012			2011
	(In thousands)
Current
Federal	$	27,983		$	19,206		$	24,705
State and city		4,748			4,449			5,368
Foreign		3,986			2,396			25

		36,717			26,051			30,098
Deferred
Federal		(1,168	)		3,821			4,884
State and city		(132	)		(252	)		1,241
Foreign		19			—			—

		(1,281	)		3,569			6,125

Income tax expense	$	35,436		$	29,620		$	36,223

Income (loss) before income taxes
United States	$	80,145		$	64,940		$	92,933
Non-United States		11,860			14,300			(28	)

	$	92,005		$	79,240		$	92,905

The significant components of the Company’s net deferred tax asset at January 31, 2013 and 2012 are summarized as follows:


	2013			2012
	(In thousands)
Deferred tax assets
Compensation	$	1,800		$	1,995
Provision for bad debts and sales allowances		8,661			7,474
Inventory write-downs		1,801			1,964
Other		600			—

Deferred tax assets, current		12,862			11,433

Compensation		4,480			2,859
Straight-line lease		3,310			2,596
Supplemental employee retirement plan		494			405
Net operating loss		354			242
Other		1,491			193

Deferred tax assets, non-current		10,129			6,295

Total deferred tax assets		22,991			17,728

Deferred tax liabilities
Prepaid expenses and other, current		(2,577	)		(1,874	)
Depreciation and amortization, non-current		(3,127	)		(1,140	)
Intangibles, non-current		(21,382	)		(6,444	)
Other		(62	)		—

Total deferred tax liabilities		(27,148	)		(9,458	)

Net deferred tax assets (liabilities)	$	(4,157	)	$	8,270

The following is a reconciliation of the statutory federal income tax rate to the effective rate reported in the financial statements for the years ended January 31:


	2013			2012			2011
Provision for Federal income taxes at the statutory rate		35.0	%		35.0	%		35.0	%
State and local income taxes, net of Federal tax benefit		3.3			3.3			4.9
Permanent differences resulting in Federal taxable income		4.8			5.5			0.4
Foreign tax rate differential		(1.4	)		(3.4	)		—
Foreign tax credit		(2.5	)		(2.5	)		—
Other, net		(0.7	)		(0.5	)		(1.3	)

Actual provision for income taxes		38.5	%		37.4	%		39.0	%

The Company accounts for uncertain income tax positions in accordance with ASC Topic 740 Income Taxes. As of January 31, 2013, the Company had no material unrecognized tax benefits. The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is currently under audit by various state and local jurisdictions for the years ended January 31, 2008 through January 31, 2011. The Company currently has tax years open from the years ended January 31, 2010 through January 31, 2013 with the exception of certain state tax jurisdictions.

The Company’s policy on classification is to include interest in “interest and financing charges” and penalties in “selling, general and administrative expense” in the accompanying Consolidated Statements of Income. The Company and certain of its subsidiaries are subject to U.S. Federal income tax as well as income tax of multiple state, local, and foreign jurisdictions. U.S. Federal income tax returns have been examined through January 31, 2009. As of January 31, 2013, the federal tax examination for the year ended January 31, 2009 was concluded with no change. One of the subsidiaries, T.R.B. International S.A., has a ruling with the Swiss government that taxes commercial foreign sourced income at an 11.6% rate. This ruling is set to expire in the year ending January 31, 2014.

Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $7.0 million at January 31, 2013. Those earnings are considered indefinitely reinvested and, accordingly, no provision for U.S. income taxes has been provided thereon. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries, as applicable. At this point in time it is not practical to estimate the amount of taxes payable if the earnings were remitted.