9.INCOME TAXES

The provision for income taxes consists of the following:

	For the Years Ended December 31,
	2016		2015		2014
Current tax provision
Federal	$	—	$	—	$	—
State	1,132		7,877		8,177

Total current provision	1,132		7,877		8,177


Deferred tax provision
Federal	—		—		—
State	—		—		—

Total deferred tax provision	—		—		—

Total income tax provision	$	1,132	$	7,877	$	8,177

The Company has $20.2 million in tax benefits attributable to net operating losses for federal tax purposes. The loss carry forwards will begin to expire in 2028 for federal tax purposes and began to expire for state tax purposes in 2013. The Company also has credits for alternative minimum taxes (“AMT”) paid of $202 thousand that are available to offset future federal income taxes, excluding AMT. Such credits do not expire.

Deferred taxes are provided for those items reported in different periods for income tax and financial reporting purposes. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below:

	December 31,
	2016			2015
Deferred tax assets
Net operating loss carry forwards	$	7,651,971		$	5,979,717
Credit for alternative minimum tax paid	201,773			201,773
Accrued expenses and reserves	1,348,032			1,383,461
Employee stock option expense	117,613			303,465
Nonemployee stock option expense	12,770			12,770
Inventory	361,437			356,170
Impairment	172,983			—

Deferred tax assets	9,866,579			8,237,356

Deferred tax liabilities
Property and equipment	(669,246		)	(485,384		)

Deferred tax liabilities	(669,246		)	(485,384		)

Net deferred assets	9,197,333			7,751,972
Valuation allowance	(9,197,333		)	(7,751,972		)

Net deferred tax assets	$	—		$	—

The valuation allowance increased $1,445,361 for 2016. The valuation allowance decreased $1,633,485 for 2015.

A reconciliation of income taxes based on the federal statutory rate and the effective income tax rate is summarized as follows:

	December 31,
	2016		2015		2014
Income tax at the federal statutory rate	35.0	%	35.0	%	35.0	%
State tax, net of federal tax	2.9		2.9		2.9
Change in valuation allowance	(39.1	)	(37.8	)	(34.3	)
Permanent differences	4.7		0.7		(0.7	)
Other	(3.5	)	(0.6	)	(3.2	)

Effective tax rate	0.0	%	0.2	%	(0.3	)%

The Company files income tax returns in the U.S. federal jurisdiction and in various state and local jurisdictions. The Company’s federal income tax returns for all tax years ended on or after December 31, 2013, remain subject to examination by the Internal Revenue Service. The Company’s state and local income tax returns are subject to examination by the respective state and local authorities over various statutes of limitations, most ranging from three to five years from the date of filing.