11.	FEDERAL AND STATE INCOME TAXES

Under GAAP, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and for income tax reporting purposes.

Significant components of the Company’s deferred tax liabilities and assets at

December

are as follows:

	2016			2015
	(in thousands)

Deferred tax liabilities:
Property and equipment	$	85,233		$	76,362
Unrealized gains on securities		4,576			3,250
Prepaid expenses and other		3,230			3,056

Total deferred tax liabilities		93,039			82,668

Deferred tax assets:
Allowance for doubtful accounts		378			208
Alternative minimum tax credit carryforward		1,214			1,378
QAFMV tax credit carryforward		864			864
New hire tax credit		124			124
Compensated absences		650			625
Self-insurance allowances		748			2,340
Share-based compensation		(54	)		230
Goodwill		9			19
Marketable equity securities		1,244			1,283
Net operating loss carryover		7,545			3,258
Non-competition agreement		7			15
Other		17			15

Total deferred tax assets		12,746			10,359

Net deferred tax liability	$	80,293		$	72,309

The reconciliation between the effective income tax rate and the statutory Federal income tax rate for the years ended

December

31,

2016,

2015

and

2014

is presented in the following table:

	2016				2015				2014
	(in thousands)
	Amount		Percent		Amount		Percent		Amount		Percent

Income tax at the statutory federal rate	$	6,042		34.0	$	11,876		34.0	$	7,552		34.0
Nondeductible expenses		130		0.7		149		0.4		154		0.7
State income taxes/other—net of federal benefit		499		2.8		1,467		4.2		1,015		4.6

Total income tax expense	$	6,671		37.5	$	13,492		38.6	$	8,721		39.3

The provision for income taxes consisted of the following:

	2016			2015		2014
	(in thousands)
Current:
Federal	$	(225	)	$	98	$	814
State		238			493		395
Total current income tax provision		13			591		1,209
Deferred:
Federal		5,506			10,782		6,111
State		1,152			2,119		1,401
Total deferred income tax provision		6,658			12,901		7,512

Total income tax expense	$	6,671		$	13,492	$	8,721

The Company has alternative minimum tax credits of approximately

$1,214,000

December

31,

2016,

which have no expiration date under the current federal income tax laws and general business credits of approximately

$988,000

which begin to expire after the year

2030.

The Company also has net operating loss carryovers for federal income purposes of approximately

$19,876,000

which begin to expire after the year

2030.

In determining whether a tax asset valuation allowance is necessary, management, in accordance with the provisions of ASC

740

30,

weighs all available evidence, both positive and negative to determine whether, based on the weight of that evidence, a valuation allowance is necessary. If negative conditions exist which indicate a valuation allowance might be necessary, consideration is then given to what effect the future reversals of existing taxable temporary differences and the availability of tax strategies might have on future taxable income to determine the amount, if any, of the required valuation allowance. As of

December

31,

2016

and

2015,

management determined that the future reversals of existing taxable temporary differences and available tax strategies would generate sufficient future taxable income to realize its tax assets and therefore a valuation allowance was not necessary.

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the position will be sustained on examination by taxing authorities, based on the technical merits of the position. As of

December

31,

2016,

an adjustment to the Company’s consolidated financial statements for uncertain tax positions has not been required as management believes that the Company’s tax positions taken in income tax returns filed or to be filed are supported by clear and unambiguous income tax laws. The Company recognizes interest and penalties related to uncertain income tax positions, if any, in income tax expense. During

2016

and

2015,

the Company has not recognized or accrued any interest or penalties related to uncertain income tax positions.

The Company and its subsidiaries are subject to U.S. and Canadian federal income tax laws as well as the income tax laws of multiple state jurisdictions. The major tax jurisdictions in which the Company operates generally provide for a deficiency assessment statute of limitation period of

three

years and as a result, the Company’s tax years

2013

and forward remain open to examination in those jurisdictions.

The Company contracts with a

third

-party qualified intermediary in order to maintain a like-kind exchange tax program. Under the program, dispositions of eligible trucks or trailers and acquisitions of replacement trucks or trailers are made in a form whereby any associated tax gains related to the disposal are deferred. To qualify for like-kind exchange treatment, we exchange, through our qualified intermediary, eligible trucks or trailers being disposed with trucks or trailers being acquired that allows us to generally carryover the tax basis of the trucks or trailers sold. The program is expected to result in a significant deferral of federal and state income taxes. Under the program, the proceeds from the sale of eligible trucks or trailers carry a Company-imposed restriction for the acquisition of replacement trucks or trailers. These proceeds

may

be disqualified under the program at any time and at the Company’s sole discretion; however, income tax deferral would not be available for any sale for which the Company disqualifies the related proceeds. At

December

31,

2016

and

2015,

the Company had

$167,000

and

$484,000

of restricted cash held by the

third

-party qualified intermediary. Restricted cash is accounted for in “Accounts receivable-other”.