INCOME TAXES

Income tax provision consisted of the following:



	Fiscal
	2016		2015		2014
	(in thousands)
Current:
Federal	$	61,506	$	64,416	$	80,205
Foreign	954		941		716
State and local	9,149		9,186		16,832
Total current tax expense	71,609		74,543		97,753
Deferred:
Federal	4,972		8,035		(1,616		)
Foreign	674		817		—
State and local	1,598		411		255
Total deferred tax expense	7,244		9,263		(1,361		)
Income tax provision	$	78,853	$	83,806	$	96,392

The following presents a reconciliation of the income tax provision at the U.S. federal statutory tax rate and the total tax provision:



	Fiscal
	2016			2015			2014
	(in thousands)
Income tax expense at federal statutory rate	$	71,186		$	76,944		$	87,297
State and local taxes, net of federal benefit	7,212			7,847			8,808
Foreign	802			1,031			(405		)
Other	(347		)	(2,016		)	692
Income tax provision	$	78,853		$	83,806		$	96,392

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows:



	January 28, 2017			January 30, 2016
	(in thousands)
Deferred tax assets:
State bonus depreciation	$	2,989		$	3,558
Inventory	9,298			7,961
Construction and tenant allowances	2,386			3,454
Stock-based compensation	11,216			10,799
Equity earnings	1,560			829
Gift cards	3,928			3,730
Accrued expenses	2,747			3,354
Accrued rewards	4,568			4,016
Accrued rent	18,007			18,212
Other	3,124			2,847
	59,823			58,760
Less: valuation allowance	(1,972		)	(1,250		)
Total deferred tax assets, net of valuation allowance	57,851			57,510
Deferred tax liabilities:
Property and equipment	(31,923		)	(32,215		)
Change in fair value of contingent consideration	(8,075		)	—
Prepaid expenses and other	(2,919		)	(3,480		)
Total deferred tax liabilities	(42,917		)	(35,695		)
Net deferred tax asset	$	14,934		$	21,815

We establish valuation allowances for deferred tax assets when the amount of expected future taxable income is not likely to support the use of the deduction or credit. The valuation allowance is related to a capital loss carryforward, state income tax credits and state income tax refunds.

As of January 28, 2017, U.S. taxes have not been provided on unremitted earnings of subsidiaries operating outside of the U.S. These earnings, which are considered to be invested indefinitely, would become subject to income tax if we elected to distribute these foreign earnings in the future. Determination of the amount of unrecognized deferred U.S. income tax liability on these unremitted earnings is not practicable.

Changes in gross unrecognized tax benefits were as follows:



	Fiscal
	2016			2015			2014
	(in thousands)
Unrecognized tax benefits - beginning of period	$	5,767		$	5,073		$	2,691
Additions for tax positions taken in the current year	2,513			2,109			2,494
Reductions for tax positions taken in prior years:
Changes in estimates	—			—			—
Lapses of applicable statutes of limitations	(475		)	(854		)	—
Settlements	(1,032		)	(561		)	(112		)
Unrecognized tax benefits - end of period	$	6,773		$	5,767		$	5,073

As of January 28, 2017, January 30, 2016 and January 31, 2015, unrecognized tax benefits of $4.8 million, $3.9 million and $3.4 million, respectively, of the total unrecognized tax benefits would affect the effective tax rate if recognized. While it is expected that the amount of unrecognized tax benefits will change in the next 12 months, any changes are not expected to have a material impact on our financial position, results of operations or cash flows. We recognize interest and penalties related to unrecognized tax benefits as a component of the income tax provision. Interest and penalties were not material for fiscal 2016, 2015 and 2014.

We are no longer subject to U.S federal income tax examination for years prior to fiscal 2014 and state income tax examinations for years prior to 2011. We have various state income tax returns in the process of examination. We estimate the range of possible changes that may result from any current and future tax examinations to be insignificant at this time.