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,
	2020		2019
Current:
Federal	$	8,885	$	7,849
State		1,737		973
Total current income tax provision		10,622		8,822
Deferred:
Federal		189		(70)
State		16		(6)
Total deferred income tax provision		205		(76)
Provision for income taxes	$	10,827	$	8,746

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,
	2020		2019
Federal statutory rate	21.0	%		21.0	%
State income taxes, net of federal tax benefit	2.8			2.0
Energy efficiency credit	(2.3)			—
Other	0.7			0.3
Effective tax rate	22.2	%		23.3	%

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,
	2020		2019
Deferred tax assets:
Allowance for doubtful accounts	$	599	$	547
Reserve accounts		134		111
State taxes		263		223
Payroll taxes		297
Uniform capitalization		45		45
Total deferred tax assets		1,338		926
Deferred tax liabilities:
Installment sale revenue		(1,006)		(1,221)
Depreciation		(1,740)		(969)
Accrued interest receivable		(526)		(465)
Other		(37)		(37)
Total deferred tax liabilities		(3,309)		(2,692)
Net deferred tax liabilities	$	(1,971)	$	(1,766)