INCOME TAXES

Income taxes consist of the following in each fiscal year (in thousands):



	2017			2016			2015
Current:
Federal	$	80,787		$	32,276		$	59,362
State	12,736			5,315			9,598
	93,523			37,591			68,960
Deferred:
Federal	(9,816		)	29,975			(2,018		)
State	(2,392		)	4,998			(1,173		)
	(12,208		)	34,973			(3,191		)
Income tax expense from continuing operations	$	81,315		$	72,564		$	65,769

Income tax benefit from discontinued operations	$	(1,868	)	$	(1,365	)	$	(2,410	)

A reconciliation of the federal statutory income tax rate to our effective tax rate for continuing operations is as follows:



	2017		2016		2015
Computed at federal statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal tax benefit	3.8		3.7		3.7
Benefit of jobs tax credits, net of valuation allowance	(0.4	)	(1.0	)	(1.1	)
(Benefit) expense related to COLIs	(1.0	)	(1.3	)	0.3
Other, net	(0.4	)	0.1		(1.0	)
	37.0	%	36.5	%	36.9	%

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at each fiscal year-end are presented below (in thousands):



	2017			2016
Deferred tax assets:
Accrued defined benefit pension and postretirement benefits	$	67,471		$	89,253
Impairment	23,986			21,904
Accrued insurance	14,708			14,378
Tax loss and tax credit carryforwards	11,860			13,624
Lease commitments related to closed or refranchised locations	10,337			7,440
Share-based compensation	9,715			9,091
Interest rate swaps	8,855			18,483
Leasing transactions	7,532			11,144
Other reserves and allowances	2,843			1,935
Deferred income	1,898			1,887
Accrued vacation pay expense	1,835			2,137
Accrued incentive compensation	1,021			5,536
Other, net	5,185			3,876
Total gross deferred tax assets	167,246			200,688
Valuation allowance	(8,507		)	(11,365		)
Total net deferred tax assets	158,739			189,323
Deferred tax liabilities:
Intangible assets	(33,448		)	(31,827		)
Property and equipment, principally due to differences in depreciation	(25,077		)	(38,859		)
Other	(1,519		)	(1,050		)
Total gross deferred tax liabilities	(60,044		)	(71,736		)
Net deferred tax assets	$	98,695		$	117,587

Deferred tax assets as of October 1, 2017 include state net operating loss carry-forwards of approximately $66.5 million expiring at various times between 2018 and 2037. At October 1, 2017 we recorded a valuation allowance of $8.5 million related to losses and state tax credits, which decreased from the $11.4 million at October 2, 2016 primarily due to the release of the valuation allowance on state tax credits. We believe that it is more likely than not that these net operating loss and credit carry-forwards will not be realized and that the remaining deferred tax assets will be realized through future taxable income or alternative tax strategies.

The major jurisdictions in which the Company files income tax returns include the United States and states in which we operate that impose an income tax. The federal statutes of limitations have not expired for fiscal years 2014 and forward. The statutes of limitations for California and Texas, which constitute the Company’s major state tax jurisdictions, have not expired for fiscal years 2013 and forward and 2012 and forward, respectively.