Note 4—Income Taxes

Income tax expense consisted of the following:


$ in thousands	2017		2016		2015
Current tax expense:
Federal	$	891	$	974	$	759
State and local		120		117		151
Foreign		1,467		1,122		1,348

Total current tax expense		2,478		2,213		2,258

Deferred tax expense (benefit):
Federal		(108)		(431)		(187)
State and local		24		98		(70)
Foreign		(268)		(18)		(256)

Total deferred tax benefit		(352)		(351)		(513)

Net income tax expense	$	2,126	$	1,862	$	1,745

The reasons for the differences between the above net income tax expense and the amounts computed by applying the statutory federal income tax rate to earnings before income taxes are as follows:


$ in thousands	2017		2016		2015
Income tax expense at statutory rate	$	2,294	$	1,952	$	1,831
State and local taxes, net of federal income tax benefit (expense)		100		102		97
Tax credits (state, net of federal benefit)		(110)		(407)		(157)
Effects of differing US and foreign tax rates		(7)		173		47
Increase (decrease) in valuation allowance		82		(10)		(40)
Other items, net		(233)		52		(33)

Net income tax expense	$	2,126	$	1,862	$	1,745

Significant items comprising deferred tax assets and liabilities as of April 30 were as follows:


$ in thousands	2017		2016
Deferred tax assets:
Accrued employee benefit expenses	$	549	$	529
Allowance for doubtful accounts		67		74
Deferred compensation		1,792		1,753
Tax credits		208		224
Unrecognized actuarial loss, defined benefit plans		3,223		3,850
Inventory Reserves		360		118
Net operating loss carryforwards		224		—
Other		113		353

Total deferred tax assets		6,536		6,901

Deferred tax liabilities:
Book basis in excess of tax basis of property, plant and equipment		(1,600)		(1,655)
Prepaid pension		(1,696)		(1,854)

Total deferred tax liabilities		(3,296)		(3,509)

Less: valuation allowance		(82)		—

Net deferred tax assets	$	3,158	$	3,392

Deferred tax assets classified in the balance sheet:
Non-current		3,158		3,392

Net deferred tax assets (liabilities)	$	3,158	$	3,392

Unremitted earnings of subsidiaries outside the United States are considered to be reinvested indefinitely at April 30, 2017. It is not practicable to determine the deferred tax liability for temporary differences related to those unremitted earnings. At April 30, 2017, the Company had state tax credit carryforwards in the amount of $208,000, net of federal benefit, expiring beginning in 2018. At April 30, 2017, the Company had $1,049,000 gross net operating losses in jurisdictions outside of the United States, of which $569,000 is set to expire in years 2020 to 2022. After a review of the expiration schedule of the net operating loss carryforwards and future taxable income required to utilize such carryforwards before their expiration, a valuation allowance of $82,000 was recorded at April 30, 2017.