11. INCOME TAXES

The Company became a corporation subject to federal income taxes on January 1, 2018, see corporate conversion in Note 1. The change in tax status required the recognition of a deferred tax asset or liability for the initial temporary differences at the time of the change in status. The resulting net deferred tax liability of $2,066 was recorded as income tax expense at the date of the completion of the corporate conversion.

Significant components of the provision for income taxes are as follows (in thousands):


	Year ended
	December 31,
	2019		2018
Current:
Federal	$	7,849	$	6,567
State		973		723
Total current income tax provision		8,822		7,290
Deferred:
Federal		(70)		1,777
State		(6)		65
Total deferred income tax provision		(76)		1,842
Provision for income taxes	$	8,746	$	9,132

A reconciliation of the Company’s effective tax rate from operations to the U.S. federal income tax rate is as follows:


	Year ended
	December 31,
	2019		2018
Federal statutory rate	21.0	%		21.0	%
State income taxes, net of federal tax benefit	2.0			2.3
Tax adjustment related to corporate conversion	—			6.5
Other	0.3			—
Effective tax rate	23.3	%		29.8	%

The tax effects of cumulative temporary differences that give rise to deferred tax assets and liabilities are as follows (in thousands):


	Year ended
	December 31,
	2019		2018
Deferred tax assets:
Allowance for doubtful accounts	$	547	$	368
Reserve accounts		111		148
State taxes		223		—
Uniform capitalization		45		54
Total deferred tax assets		926		570
Deferred tax liabilities:
Installment sale revenue		(1,221)		(1,356)
Depreciation		(969)		(732)
Accrued interest receivable		(465)		(288)
Other		(37)		(36)
Total deferred tax liabilities		(2,692)		(2,412)
Net deferred tax liabilities	$	(1,766)	$	(1,842)