NOTE 4. INCOME TAXES

On a quarterly basis, we estimate what our effective tax rate will be for the full fiscal year and record a quarterly income tax provision based on the anticipated rate. As the year progresses, we refine our estimate based on the facts and circumstances, including discrete events, by each tax jurisdiction. Our effective tax rate for the three months ended March 31, 2016 and 2015 was 29% and 35%, respectively. The effective tax rate for the year ended December 31, 2016 is expected to be 30% compared to 36% for the year ended December 31, 2015. The decrease is due mainly to the impact of the federal research and development credit.

The differences between federal income taxes computed at the federal statutory rate and reported income taxes for the three months ended March 31, 2016 and 2015 are as follows:

	Three Months Ended
	March 31
	2016			2015
Statutory federal tax provision (benefit)	$	34,000		$	(82,000	)
State income taxes (benefits)	3,000			(10,000		)
Income tax credits	(23,000		)	(13,000		)
Other	12,000			1,000

Income tax expense (benefit)	$	26,000		$	(104,000	)

At March 31, 2016 and December 31, 2015, we had $51,000 of net uncertain tax benefit positions remaining in other long-term liabilities related to research and development credits that would increase our effective income tax rate if recognized