Entity information:
INCOME TAXES
The provisions for income taxes consist of the following:
 
2017
 
2016
 
2015
Current expense (benefit):
 
 
 
 
 
Federal
$
(12,253
)
 
$
(17,845
)
 
$
34,990

State
5,739

 
6,805

 
15,138

Total current (benefit) expense
(6,514
)
 
(11,040
)
 
50,128

Deferred expense (benefit):
 
 
 
 
 
Federal
70,293

 
71,005

 
28,877

State
8,593

 
6,262

 
815

Investment tax credit amortization
(318
)
 
(329
)
 
(336
)
Total income tax expense
$
72,054

 
$
65,898

 
$
79,484


A reconciliation from the U.S. federal statutory tax rate to our effective tax rate is as follows:
 
2017
 
2016
 
2015
U.S. federal statutory tax rate
35.0
 %
 
35.0
%
 
35.0
 %
Difference in tax rate due to:
 
 
 
 
 
State income taxes, net of federal benefit
5.0

 
5.2

 
5.1

Excess tax benefits on share-based payments
(0.9
)
 
—

 
—

Other, net
(0.8
)
 
0.2

 
(0.5
)
Effective tax rate
38.3
 %
 
40.4
%
 
39.6
 %


Pennsylvania utility ratemaking practice permits the flow through to ratepayers of state tax benefits resulting from accelerated tax depreciation. For Fiscal 2017, Fiscal 2016 and Fiscal 2015, the beneficial effects of state tax flow through of accelerated depreciation reduced tax expense by $2,537, $1,344 and $1,539, respectively.
Deferred tax liabilities (assets) comprise the following at September 30:
 
2017
 
2016
Excess book basis over tax basis of property, plant and equipment
$
564,327

 
$
491,038

Goodwill
49,588

 
45,070

Derivative financial instruments
—

 
948

Regulatory assets
136,093

 
149,660

Other
3,140

 
2,910

Gross deferred tax liabilities
753,148

 
689,626

Pension plan liabilities
(57,011
)
 
(74,129
)
Allowance for doubtful accounts
(1,681
)
 
(1,637
)
Deferred investment tax credits
(1,224
)
 
(1,356
)
Employee-related expenses
(6,793
)
 
(5,247
)
Regulatory liabilities
(12,780
)
 
(16,798
)
Environmental liabilities
(22,224
)
 
(22,757
)
Derivative financial instruments
(354
)
 
—

Other
(15,616
)
 
(17,473
)
Gross deferred tax assets
(117,683
)
 
(139,397
)
Net deferred tax liabilities
$
635,465

 
$
550,229


We join with UGI and its subsidiaries in filing a consolidated federal income tax return. We are charged or credited for our share of current taxes resulting from the effects of our transactions in the UGI consolidated federal income tax return including giving effect to intercompany transactions. UGI’s federal income tax returns are settled through the tax year 2013.
We file separate company income tax returns in various other states but are subject to state income tax principally in Pennsylvania. Pennsylvania income tax returns are generally subject to examination for a period of three years after the filing of the respective returns.
During Fiscal 2017, Fiscal 2016 and Fiscal 2015, interest (income) expense of $(73), $204 and $0, respectively, was recognized in income taxes in the Consolidated Statements of Income.
As of September 30, 2017, we have unrecognized income tax benefits totaling $1,829 including related accrued interest of $132. If these unrecognized tax benefits were subsequently recognized, $940 would be recorded as a benefit to income taxes on the Consolidated Statement of Income and, therefore, would impact the reported effective tax rate. Generally, a net reduction in unrecognized tax benefits could occur because of the expiration of the statute of limitations in certain jurisdictions or as a result of settlements with tax authorities. There is no material change expected in unrecognized tax benefits and related interest in the next twelve months.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
 
2017
 
2016
 
2015
Unrecognized tax benefits – beginning of year
$
2,055

 
$
—

 
$
—

Additions for tax positions taken in prior years
604

 
2,055

 
—

Additions for tax positions of the current year
—

 
—

 
—

Settlements with tax authorities/statute lapses
(830
)
 
—

 
—

Unrecognized tax benefits – end of year
$
1,829

 
$
2,055

 
$
—