Income Taxes (Notes)

12 Months Ended

Dec. 31, 2015

The Company files a consolidated federal income tax return. It is the policy of the Company to allocate the consolidated tax provision to subsidiaries as if each subsidiary’s tax liability or benefit were determined on a separate company basis. As part of the consolidated group, subsidiaries transfer to the Company their current federal tax liabilities or assets.



	As of December 31,
	2015			2014		2013
Current city income tax provision	$	1,245,285		$	935,612	$	952,957
Current state income tax provision	335,897			429,147		268,920
Current federal income tax provision	22,874,571			15,015,813		17,866,911
Deferred federal income tax expense (benefit)	(3,547,088		)	2,404,433		(5,611,451		)
Provision for income taxes	$	20,908,665		$	18,785,005	$	13,477,337

A reconciliation of income tax expense at the statutory federal rate to the Company’s income tax expense is as follows:



	2015			2014		2013
Income tax computed at statutory rate	$	20,294,107		$	17,628,078	$	12,471,258
City and state income taxes, net of federal benefit	1,027,768			887,093		794,220
Other	(413,210		)	269,834		211,859
Income tax expense	$	20,908,665		$	18,785,005	$	13,477,337

Net deferred tax assets consist of the following at December 31, 2015 and 2014:



	2015			2014
Stock-based compensation	$	6,077,629		$	5,433,419
Accrued compensation	4,724,670			2,964,688
Unrealized gains	(722,466		)	(2,436,006		)
Property and equipment	(815,825		)	(369,248		)
Other assets and liabilities	(57,929		)	66,139
Net deferred tax assets	$	9,206,079		$	5,658,992

The net temporary differences incurred to date will reverse in future periods as the Company generates taxable earnings. The Company believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the net deferred tax assets recorded. The Company records a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2015, no valuation allowance was deemed necessary.

The Company's income taxes payable has been reduced by the tax benefits from equity incentive plan awards. These tax benefits are considered windfall tax benefits under ASC 718 and are recognized as an increase to common stock. For Restricted Stock, the Company receives an excess income tax benefit calculated as the tax effect of the difference between the fair market value of the stock at the time of grant and vesting. The Company also records a tax benefit on dividends paid on Restricted Stock during the vesting period. The Company had net tax benefits from equity awards of $2.9 million, $1.0 million, and $0.8 million, for the years ended December 31, 2015, 2014 and 2013, respectively.

FASB ASC 740, Income Taxes, prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company did not record an accrual for tax related uncertainties or unrecognized tax positions as of December 31, 2015. The Company does not expect a change to the reserve for uncertain tax positions within the next twelve months that would have a material impact on the consolidated financial statements.

The Company files income tax returns in the federal and all applicable state and local jurisdictions. The Company is subject to federal, state and local examinations by tax authorities for tax years ended December 31, 2012 through 2015.