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INCOME TAXES

12 Months Ended

Jan. 31, 2015

13. INCOME TAXES

The provision (benefit) for income taxes from continuing operations for fiscal years 2014, 2013 and 2012 consists of the following (amounts in thousands):

	2014		2013		2012
Federal:
Current	$	23,452	$	2,974	$	—
Deferred		20,717		15,402		(1,518	)

		44,169		18,376		(1,518	)
State and Local:
Current		3,536		2,154		—
Deferred		1,944		221		(30	)

		5,480		2,375		(30	)
Provision (benefit) for income taxes	$	49,649	$	20,751	$	(1,548	)

The tax effects of significant temporary differences representing deferred tax assets and liabilities are as follows as of January 31, 2015 and 2014 (amounts in thousands):

	January 31,
	2015			2014
Assets:
Accrued liabilities	$	664		$	331
Stock based compensation		—			185
AMT credit carryforward		4,015			19,751
Alcohol fuels tax credit		—			546
State net operating loss carryforward		1,343			2,833
Other items		624			396
Valuation allowance		(1,752	)		(2,017	)

Total		4,894			22,025
Liabilities:
Basis in pass through entities, including depreciation		(44,783	)		(39,195	)
Other		(516	)		(297	)

Total		(45,299	)		(39,492	)
Net deferred tax liability	$	(40,405	)	$	(17,467	)

The Company has approximately $4.0 million and $19.8 million of AMT credit carryforwards as of January 31, 2015 and 2014, respectively. The AMT credit carryforwards can be used to offset future regular income tax liabilities subject to certain limitations. The AMT credit carryforwards have no expiration date. The Company must generate approximately $27 million in future taxable income to fully utilize the AMT credit carryforward.

The Company has state net operating loss carryforwards of approximately $18.0 million, net of the federal benefit, which will begin to expire in fiscal year 2019.

The Company has a valuation allowance of approximately $1,752,000 at January 31, 2015. The Company decreased the valuation allowance by $265,000 in fiscal year 2014 and increased the valuation allowance by $126,000 and $215,000 in fiscal years 2013, and 2012, respectively. These adjustments to the valuation allowance are a result of estimates of realizing certain future state tax benefits and federal capital loss carryforwards.

The Company paid income taxes of approximately $30,142,000, $3,450,000 and $51,000 in fiscal years 2014, 2013 and 2012, respectively. The Company received refunds of income taxes of approximately $53,000, $38,000 and $1,005,000 in fiscal years 2014, 2013 and 2012, respectively.

The effective income tax rate on consolidated pre-tax income or loss differs from the federal income tax statutory rate for fiscal years 2014, 2013 and 2012 as follows:

	2014			2013			2012

Federal income tax at statutory rate		35.0	%		35.0	%		35.0	%
State and local taxes, net of federal tax benefit		3.6			4.5			5.6
Net change in valuation allowance		(0.2	)		0.2			(5.0	)
Domestic production activities deduction		(1.1	)		(1.5	)		—
Uncertain tax positions		—			(0.1	)		(1.5	)
Noncontrolling interest		(4.0	)		(3.4	)		6.7
Other		(0.8	)		(0.1	)		1.8

Total		32.5	%		34.6	%		42.6	%

The Company files a U.S. federal income tax return and income tax returns in various states. In general, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for fiscal years ended January 31, 2011 and prior.

The Company applies the provisions of ASC 740-10-25-5 for uncertain tax positions. As of January 31, 2015, total unrecognized tax benefits were $1,191,000, and accrued penalties and interest were $467,000. If the Company were to prevail on all unrecognized tax benefits recorded, the impact of penalties and interest would benefit the effective tax rate. Interest and penalties associated with unrecognized tax benefits are recorded within income tax expense.

On a quarterly and annual basis, the Company accrues for the effects of open uncertain tax positions and the related potential penalties and interest. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during the next 12 months; however, the Company does not expect the change to have a material effect on results of operations or financial position. A reconciliation of the beginning and ending amount of unrecognized tax benefits, including interest and penalties, is as follows (dollars in thousands):

	Years Ended
	January 31,
		2015			2014

Unrecognized tax benefits, beginning of year	$	1,862		$	2,157
Changes for tax positions for prior years		(204	)		(295	)
Changes for tax positions for current year		—			—

Unrecognized tax benefits, end of year	$	1,658		$	1,862

- 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.

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