INCOME TAXES

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



	2018		2017			2016
Current:
Federal	$	51,454	$	79,038		$	23,768
State	4,922		12,368			3,679
	56,376		91,406			27,447
Deferred:
Federal	23,462		(13,176		)	28,455
State	1,890		(2,898		)	4,838
	25,352		(16,074		)	33,293
Income tax expense from continuing operations	$	81,728	$	75,332		$	60,740

Income tax expense (benefit) from discontinued operations	$	15,700	$	(4,119	)	$	10,453

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



	2018		2017		2016
Computed at federal statutory rate	24.5	%	35.0	%	35.0	%
Non-cash impact of the Tax Act	17.5	%	—	%	—	%
State income taxes, net of federal tax benefit	4.7	%	3.8	%	3.7	%
Stock compensation excess tax benefit	(1.1	)%	—	%	—	%
Benefit of jobs tax credits, net of valuation allowance	(0.4	)%	(0.4	)%	(1.0	)%
Benefit related to COLIs	(0.4	)%	(1.1	)%	(1.5	)%
Other, net	(0.9	)%	(0.4	)%	0.1	%
	43.9	%	36.9	%	36.3	%

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):



	2018			2017
Deferred tax assets:
Accrued defined benefit pension and postretirement benefits	$	34,776		$	67,334
Impairment	11,388			18,697
Accrued insurance	8,994			14,701
Tax loss and tax credit carryforwards	7,458			11,841
Share-based compensation	4,936			9,715
Lease commitments related to closed or refranchised locations	4,696			9,382
Accrued incentive compensation	2,055			628
Accrued vacation pay expense	2,034			1,560
Deferred income	1,535			2,289
Other reserves and allowances	851			1,386
Interest rate swaps	181			8,855
Other, net	2,206			2,960
Total gross deferred tax assets	81,110			149,348
Valuation allowance	(3,554		)	(8,507		)
Total net deferred tax assets	77,556			140,841
Deferred tax liabilities:
Intangible assets	(10,492		)	(15,995		)
Leasing transactions	(2,790		)	(758		)
Property and equipment, principally due to differences in depreciation	(1,855		)	(18,406		)
Other	(279		)	(564		)
Total gross deferred tax liabilities	(15,416		)	(35,723		)
Net deferred tax assets	$	62,140		$	105,118

The Tax Act was enacted into law on December 22, 2017. The Tax Act included a reduction in the U.S. federal statutory corporate income tax rate (the “Tax Rate”) from 35% to 21% and introduced new limitations on certain business deductions. As a result, we recognized a non-cash tax provision expense impact of $32.5 million, primarily related to the re-measurement of our deferred tax assets and liabilities due to the reduced tax rate.

Deferred tax assets as of September 30, 2018 include state net operating loss carry-forwards of approximately $43.5 million expiring at various times between 2019 and 2037. At September 30, 2018, we recorded a valuation allowance of $3.6 million which decreased from the $8.5 million at October 1, 2017 primarily due to the release of the valuation allowance on state tax credits and net operating losses. We believe that it is more likely than not that the remaining net operating loss and credit carry-forwards will not be realized and that all other 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 2015 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 2014 and forward and 2013 and forward, respectively.