Income Taxes

The components of income (loss) before income tax provision (benefit) and the income tax provision (benefit) for the years ended December 31 are as follows:



	2019			2018
Income (loss) before income tax provision (benefit)
Domestic	$	40,742		$	45,170
Foreign	2,657			(3,007		)
	$	43,399		$	42,163
Income tax provision (benefit)
Current income tax provision (benefit):
Federal	$	(6,473	)	$	(2,296	)
State	939			393
Foreign	603			—
Total current	(4,931		)	(1,903		)
Deferred income tax provision:
Federal	8,125			8,585
State	573			696
Total deferred	8,698			9,281
	$	3,767		$	7,378

The Company made income tax payments of $1.0 million and $0.5 million during 2019 and 2018, respectively. During the same periods, income tax refunds totaled $2.6 million and $0.1 million, respectively.

A reconciliation of the federal statutory and effective income tax rate for the years ended December 31 is as follows:



	2019			2018
Income before income tax provision	$	43,399		$	42,163
Statutory taxes at 21.0%	$	9,114		$	8,854
State and local income taxes	1,129			1,241
Non-deductible expenses	736			663
Percentage depletion	(4,451		)	(4,199		)
R&D and other federal credits	(255		)	(37		)
Settlements	(2,377		)	323
Other, net	(129		)	533
Income tax provision	$	3,767		$	7,378
Effective income tax rate	8.7		%	17.5		%

Income tax expense for the year ended December 31, 2019 included a net discrete tax benefit of $2.5 million primarily resulting from effective settlement of certain items from on-going examinations and changes in prior year estimates. Income tax expense for the year ended December 31, 2018 included $1.2 million of discrete tax expense primarily related to an additional valuation allowance provided against deferred tax assets in India as the Company had previously determined that such deferred tax assets do not meet the more likely than not standard for realization.

A detailed summary of the total deferred tax assets and liabilities in the Company's Consolidated Balance Sheets resulting from differences in the book and tax bases of assets and liabilities follows:



	December 31
	2019			2018
Deferred tax assets
Lease liabilities	$	30,875		$	—
Tax carryforwards	16,305			19,058
Inventories	1,704			2,041
Accrued liabilities	10,020			9,860
Employee benefits	4,853			4,892
Other	9,005			9,347
Total deferred tax assets	72,762			45,198
Less: Valuation allowance	12,296			14,219
	60,466			30,979
Deferred tax liabilities
Lease right-of-use assets	30,875			—
Depreciation and depletion	28,061			27,299
Partnership investment - development costs	9,949			5,146
Accrued pension benefits	3,919			1,380
Total deferred tax liabilities	72,804			33,825
Net deferred liability	$	(12,338	)	$	(2,846	)

The following table summarizes the tax carryforwards and associated carryforward periods and related valuation allowances where the Company has determined that realization is uncertain:



	December 31, 2019
	Net deferred tax asset		Valuation allowance		Carryforwards expire during:
State net operating loss	$	16,531	$	13,668	2020-2039
Federal research credit	1,455		—		2034-2038
Federal foreign tax credit	463		463		2029
Alternative minimum tax credit	1,596		—		(1)
Total	$	20,045	$	14,131



	December 31, 2018
	Net deferred tax asset		Valuation allowance		Carryforwards expire during:
Non-U.S. net operating loss	$	2,340	$	2,340	2024-2026
State net operating loss	16,624		13,182		2019-2038
Federal research credit	1,198		—		2034-2038
Alternative minimum tax credit	2,310		—		(1)
Total	$	22,472	$	15,522

(1) This credit is refundable in 2021, if not fully utilized prior to 2021.

The Company has a valuation allowance for certain state and foreign deferred tax assets. Based upon the review of historical earnings and the relevant expiration of carryforwards, including utilization limitations in the various state taxing jurisdictions, the Company believes the valuation allowances are appropriate and does not expect to release valuation allowances within the next twelve months that would have a significant effect on the Company's financial position or results of operations.

The tax returns of the Company and certain of its subsidiaries are under routine examination by various taxing authorities. The Company has not been informed of any material assessment for which an accrual has not been previously provided and the Company would vigorously contest any material assessment. Management believes any potential adjustment would not materially affect the Company's financial condition or results of operations.

In general, the Company operates in taxing jurisdictions that provide a statute of limitations period ranging from three to five years for the taxing authorities to review the applicable tax filings. The examination of the 2013-2016 U.S. federal tax returns is ongoing. The Company does not have any material taxing jurisdictions in which the statute of limitations has been extended beyond the applicable time frame allowed by law.

The following is a reconciliation of the Company's total gross unrecognized tax benefits, defined as the aggregate tax effect of differences between tax return positions and the benefits recognized in the financial statements for the years ended December 31, 2019 and 2018. Approximately $2.3 million and $1.1 million of these gross amounts as of December 31, 2019 and 2018, respectively, relate to permanent items that, if recognized, would impact the effective income tax rate. This amount differs from the gross unrecognized tax benefits presented in the table below due to the decrease in U.S. federal income taxes which would occur upon the recognition of the state tax benefits included herein.



	2019		2018
Balance at January 1	$	1,280	$	997
Additions based on tax positions related to prior years	1,172		283
Additions based on tax positions related to the current year	408		—
Balance at December 31	$	2,860	$	1,280

The Company records interest and penalties on uncertain tax positions as a component of the income tax provision. The Company recognized net expense of less than $0.1 million in interest and penalties related to uncertain tax positions during 2019 and 2018, respectively. The total amount of interest and penalties accrued was $0.1 million and $0.1 million as of December 31, 2019 and 2018, respectively.

The Company expects the amount of unrecognized tax benefits will change within the next 12 months; however, the change in unrecognized tax benefits, which is reasonably possible within the next 12 months, is not expected to have a significant effect on the Company's financial position, results of operations or cash flows.