	2018		2017		2016
Current:
Federal	$	12,483	$	19,153	$	21,634
State		2,871		4,046		5,289
		15,354		23,199		26,923
Deferred:
Federal		708		2,734		(105	)
State		920		28		(2,302	)
		1,628		2,762		(2,407	)
Income tax expense	$	16,982	$	25,961	$	24,516

The following table provides a reconciliation between the statutory federal income tax rate and our effective income tax rate:

	2018			2017			2016
Statutory federal income tax		21.0	%		35.0	%		35.0	%
State income taxes, net of federal benefit		3.3			2.5			2.6
Manufacturing deduction		—			(3.5	)		(3.3	)
Tax Cuts and Jobs Act effects		(3.9	)		(1.9	)		—
Changes in unrecognized tax benefits		1.2			(0.6	)		1.2
R&D tax credits		(2.0	)		(1.1	)		(1.4	)
Other		—			(1.9	)		(1.8	)
Effective income tax rate		19.6	%		28.5	%		32.3	%

We file income tax returns with the U.S. federal government and various state jurisdictions. In the normal course of business, we are subject to examination by federal and state taxing authorities. We are no longer subject to federal income tax examinations for years prior to 2015 or state income tax examinations prior to 2014.

On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was enacted. The TCJA reduced the statutory federal tax rate from 35% to 21% starting in 2018. In addition, there were various other tax law changes that impacted us. In connection with the reduction of the federal tax rate, we recognized a provisional tax benefit of $1.7 million for the year ended December 30, 2017. This provisional tax benefit was related to the re-measurement of U.S. deferred tax assets and liabilities using a federal tax rate of 21%, which, under the TCJA, is expected to be in place when such deferred assets and liabilities reverse in future periods. During 2018, we updated our provisional tax benefit based on new information, including a tax planning analysis, and recorded an additional $2.9 million tax benefit.

The TCJA has significant complexity and our 2018 tax liability may differ from these estimates, due to, among other things, guidance that may be issued by the U.S. Treasury Department, the Internal Revenue Service, state tax jurisdictions, and related interpretations and clarifications of tax law.

The tax effects of temporary differences that give rise to deferred income taxes were as follows (in thousands):

	2018			2017
Deferred tax assets:
Stock-based compensation	$	7,633		$	6,940
Deferred rent and lease incentives		6,994			6,007
Warranty and returns liabilities		6,857			6,602
Net operating loss carryforwards and credits		2,324			3,240
Compensation and benefits		3,699			3,315
Other		3,406			3,321
Total gross deferred tax assets		30,913			29,425
Valuation allowance		(615	)		(615	)
Total gross deferred tax assets after valuation allowance		30,298			28,810
Deferred tax liabilities:
Property and equipment		29,912			21,475
Deferred revenue		1,749			723
Other		3,459			3,987
Total gross deferred tax liabilities		35,120			26,185
Net deferred tax (liabilities) assets	$	(4,822	)	$	2,625

At December 29, 2018, we had net operating loss carryforwards for federal purposes of $1 million, which will expire between 2025 and 2027, and for state income tax purposes of $6 million, which will expire between 2028 and 2038.

We evaluate our deferred income taxes quarterly to determine if valuation allowances are required. As part of this evaluation, we assess whether valuation allowances should be established for any deferred tax assets that are not considered more likely than not to be realized, using all available evidence, both positive and negative. This assessment considers, among other matters, the nature, frequency, and severity of historical losses, forecasts of future profitability, taxable income in available carryback periods and tax planning strategies. In making such judgments, significant weight is given to evidence that can be objectively verified. We have provided a $0.6 million valuation allowance resulting primarily from our inability to utilize certain foreign net operating losses, and federal net operating losses associated with our 2015 acquisition of BAM Labs, Inc.

Reconciliations of the beginning and ending amounts of unrecognized tax benefits were as follows (in thousands):

	Federal and State Tax
	2018			2017			2016
Beginning balance	$	2,839		$	3,460		$	2,077
Increases related to current-year tax positions		778			330			326
Increases related to prior-year tax positions		595			87			1,594
Decreases related to prior-year tax positions		—			(1,038	)		—
Lapse of statute of limitations		(333	)		—			(333	)
Settlements with taxing authorities		(13	)		—			(204	)
Ending balance	$	3,866		$	2,839		$	3,460

As of December 29, 2018 and December 30, 2017, we had $4 million and $3 million, respectively, of unrecognized tax benefits, which if recognized, would affect our effective tax rate. The amount of unrecognized tax benefits is not expected to change materially within the next 12 months.