(14) Income Taxes

For the fiscal years ended January 31, 2015, February 1, 2014 and February 2, 2013, the income tax provision consisted of the following:

	January 31,			February 1,		February 2,
	2015			2014		2013
Current:
Federal	$	7,687		$	9,421	$	14,337
State		987			1,248		3,447
Total current		8,674			10,669		17,784
Deferred:
Federal		(103	)		1,830		1,549
State		57			339		(257	)
Change in valuation allowance		—			—		—
Total deferred		(46	)		2,169		1,292
Total income tax provision	$	8,628		$	12,838	$	19,076

The provision for income taxes differs from the amounts computed by applying the federal statutory rate as follows for the following periods:

	January 31,			February 1,			February 2,
	2015			2014			2013
Federal statutory rate		35.0	%		35.0	%		35.0	%
State tax, net of federal benefit		3.5			3.6			4.2
Permanent items		0.2			0.3			2.3
Valuation allowance		0.0			0.0			0.0
Other items	(0.2)			(1.8)			(1.0)
Effective income tax rate		38.5	%		37.1	%		40.5	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at January 31, 2015 and February 1, 2014, respectively, are presented below:

	January 31,			February 1,
	2015			2014
Deferred tax assets:
Accrued liabilities	$	444		$	389
Allowance for doubtful accounts		44			40
Deferred rent		11,932			9,884
Inventories		2,189			2,228
Litigation accrual		1,540			—
Net operating loss		51			93
Sales return reserve		276			248
Stock-based compensation		600			—
Total gross deferred tax assets	$	17,076		$	12,882
Deferred tax liabilities:
Depreciation	$	(8,125	)	$	(3,926	)
Prepaid expenses		(625	)		(676	)
Total gross deferred tax liabilities	$	(8,750	)	$	(4,602	)
Net deferred tax asset	$	8,326		$	8,280

As of January 31, 2015 and February 1, 2014, the components of the current and long-term deferred income taxes are as follows:

	January 31,			February 1,
	2015			2014
Current deferred tax assets, net:
Accrued liabilities	$	444		$	389
Allowance for doubtful accounts		44			40
Inventories		2,189			2,228
Prepaid expenses		(625	)		(676	)
Sales return reserve		276			248
Stock-based compensation		600			—
Current deferred tax assets, net	$	2,928		$	2,229
Non-current deferred tax assets, net:
Deferred rent	$	11,932		$	9,884
Depreciation		(8,125	)		(3,926	)
Litigation accrual		1,540			—
Net operating loss		51			93
Non-current deferred tax assets, net	$	5,398		$	6,051

Deferred tax assets have resulted primarily from the Company’s future deductible temporary differences. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company’s ability to realize its deferred tax assets depends upon the generation of sufficient future taxable income to allow for the utilization of its net operating loss carryforwards and deductible temporary differences.

Management evaluates the realizability of the deferred tax assets and the need for additional valuation allowances annually. At January 31, 2015, based on current facts and circumstances, management believes that it is more likely than not that the Company will realize benefit for its gross deferred tax assets.

As of January 31, 2015, the Company had no unrecognized tax benefits. The Company does not anticipate that unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date. There are no tax returns that are currently under examination. Federal and state tax years that remain subject to examination are periods ended January 29, 2011 through January 31, 2015.

At February 1, 2014, the Company had state net operating loss carry-forwards of approximately $3,047, of which $1,369 was used to offset taxable income in fiscal year 2014. At January 31, 2015, the Company had state net operating loss carry-forwards of approximately $1,678 remaining.

The Company’s policy is to accrue interest expense, and penalties as appropriate, on estimated unrecognized tax benefits as a charge to interest expense in the consolidated statements of income. During 2014, the Company accrued interest and penalties of $14. No interest or penalties were accrued for 2013 or 2012.

On September 13, 2013, the U. S. Treasury and Internal Revenue Service issued final Tangible Property Regulations (“TPR”) under Internal Revenue Code (“IRC”) Section 162 and IRC Section 263(a). The regulations became effective for tax years beginning on or after January 1, 2014, and certain portions may require a tax method change on a retroactive basis, thus requiring an IRC Section 481(a) adjustment related to fixed and real asset deferred taxes. The accounting guidance under Accounting Standards Codification 740 - Income Taxes, treats the release of these regulations as a change in tax law as of the date of issuance and requires the Company to determine whether there will be an impact on its consolidated financial statements for fiscal year 2014. Any such impact of the final tangible property regulations would affect temporary deferred taxes only and result in a consolidated balance sheet reclassification between current and deferred taxes. The Company has analyzed the expected impact of the TPR on the Company as of January 31, 2015, and concluded that the expected impact is minimal. The Company will continue to prospectively monitor the impact of any future changes to the TPR on the Company.