8. INCOME TAXES

The components of the income tax expense from continuing operations for the years ended December 31, 2016, 2015, and 2014 are as follows:


	2016		2015		2014
Current
Federal	$	11,605	$	9,814	$	10,282
State		511		396		96
Total current		12,116		10,210		10,378

Deferred
Federal		(3,078)		(125)		176
State		253		39		206
Foreign		(4)		(20)		(96)
Total deferred		(2,829)		(106)		286

Total income tax expense from continuing operations	$	9,287	$	10,104	$	10,664

The total tax provision for the years ended December 31, 2016, 2015, and 2014 was $9.0 million, $9.9 million, $4.9 million, respectively. Those amounts have been allocated to the following financial statement items:


	2016		2015		2014

Income from continuing operations	$	9,287	$	10,104	$	10,664
Income/(loss) from discontinued operations		-		387		(5,302)
Stockholders' equity, unrealized gain loss on investment securities & foreign currency		(74)		(357)		(182)
Additional paid in capital, share-based compensation tax benefit		(230)		(247)		(275)

Total income tax expense	$	8,983	$	9,887	$	4,905

The Company elected to early adopt pronouncement ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, as of December 31, 2016 and applied its provisions retrospectively to each prior period presented for comparative purposes. The provision requires the Company to classify all deferred tax assets and liabilities as noncurrent, For the years ended December 31, 2016, 2015, and 2014, the Company reclassified $1.7 million, $1.2 million, and $3.7 million, respectively, in current net deferred tax assets against the Company’s non-current deferred tax liability.

Deferred tax assets (liabilities) consisted of the following at December 31,


	2016		2015		2014

Reserves on inventory and sales	$	446	$	199	$	291
Credit and loss carryforwards		527		735		699
Stock compensation		1,333		1,149		1,283
Accrued expenses and deferred costs		638		1,068		3,170
Inventory capitalization		252		49		142
Sales tax accrual		-		-		8
Unrealized gain on investments		160		85		-
Total deferred tax assets		3,356		3,285		5,593

Unrealized loss on investments		-		-		(294)
Prepaid expenses		(659)		(755)		(779)
Depreciation		(3,453)		(6,189)		(6,285)
Foreign currency		(23)		(23)		-
Total deferred tax liabilities		(4,135)		(6,967)		(7,358)

Net deferred tax liabilities	$	(779)	$	(3,682)	$	(1,765)

The differences between the United States federal statutory tax rate and the Company's effective tax rate for the years ended December 31, 2016, 2015, and 2014 are as follows:


	2016			2015			2014
Statutory federal tax	$	9,493	35.0%	$	10,381	35.0%	$	11,093	35.0%
State income taxes, net of federal benefit		797	2.9%		414	1.4%		314	1.0%
Foreign Taxes		3	0.0%		15	0.1%		73	0.2%
Domestic manufacturer deduction		(920)	-3.4%		(824)	-2.8%		(811)	-2.6%
Other permanent differences		41	0.2%		4	0.0%		200	0.6%
Research and development and jobs credits		(163)	-0.6%		(247)	-0.8%		(203)	-0.6%
Other state income tax benefits		-	0.0%		114	0.4%		(113)	-0.4%
Other		36	0.1%		247	0.8%		111	0.4%
	$	9,287	34.2%	$	10,104	34.1%	$	10,664	33.6%

The 2016, 2015 and 2014 effective tax rates were impacted by the Company’s extensive state income tax planning. This planning includes taking advantage of Maryland’s apportionment methodology. As a manufacturing entity based in Maryland, the Company utilizes the single sales factor apportionment method in addition to claiming new state jobs credits and research & development credits. In 2014 the Company benefited from research and development credits effective January 1, 2014 in addition to filing an amended federal return to claim 2010 research and development credits due to changes in Federal regulations.

The Company has separate company state net operating loss carry forwards totaling $8.0 million that start expiring in 2031 and a capital loss carryforward totaling $110 thousand that expires in 2022. Maryland state credits carry forwards totaling $116 thousand will begin to expire in 2017.