(13)

Income Taxes

Income tax expense is as follows:


	Year ended December 31,
	2014		2015
Current:
Federal	$	4,649,581	$	1,624,206
State		832,118		226,470

		5,481,699		1,850,676
Deferred:
Federal		23,421,301		2,123,431
State		1,007,025		(333,320	)

		24,428,326		1,790,111

	$	29,910,025	$	3,640,787

Income taxes are allocated as follows:
Continuing operations	$	514,275	$	3,640,787
Discontinued operations		29,395,750		—

	$	29,910,025	$	3,640,787

Income tax expense differs from the amounts that would result from applying the federal statutory rate of 35% to the Company’s income before taxes as follows:


	Year ended December 31,
	2014			2015
Expected tax expense	$	24,468,287		$	3,501,088
State income taxes, net of federal benefit		1,195,443			331,177
Income tax rate adjustments		1,109,211			(400,629	)
Change in valuation allowance		(3,333	)		(36,696	)
Non-deductible items		3,140,417			245,847

	$	29,910,025		$	3,640,787
Discontinued operations		29,395,750			—

Continuing operations	$	514,275		$	3,640,787

Temporary differences that give rise to the components of deferred tax assets and liabilities are as follows:


	December 31,
	2014			2015
Deferred tax assets:
Allowance for doubtful accounts	$	329,107		$	319,049
Other assets		780,009			15,752
Accrued expenses		134,277			212,808
Other long-term liabilities		286,149			688,462
Stock-based compensation		404,667			321,860
Net operating losses		293,184			277,235

Subtotal		2,227,393			1,835,166
Valuation allowance		(630,775	)		(594,079	)

Total		1,596,618			1,241,087

Deferred tax liabilities:
Prepaid expenses		(243,067	)		(382,250	)
Property and equipment		(3,088,066	)		(2,907,439	)
Intangibles		(74,041,982	)		(75,690,599	)

Total		(77,373,115	)		(78,980,288	)

Net deferred tax liabilities	$	(75,776,497	)	$	(77,739,201	)

As of December 31, 2015, the Company has state net operating losses of $5.8 million, which expire in various years through 2030. The valuation allowance relates to net operating losses and unrealized losses on investments which management has determined, more likely than not, that such losses will not be utilized.

As of December 31, 2014 and 2015, the Company does not have any material unrecognized tax benefits and accordingly has not recorded any interest or penalties related to unrecognized tax benefits. The Company and its subsidiaries file a consolidated federal income tax return and various state returns. These returns remain subject to examination by taxing authorities for all years after 2011.