The components of the deferred income tax (assets) and liabilities as of April 30, 2017 and 2016 are as follows:
| 2017 | 2016 | |||||||
| Total deferred tax liabilities | ||||||||
| Patents | $ | 38,996 | $ | 38,330 | ||||
| Prepaid and other | $ | 7,671 | $ | 7,012 | ||||
| 46,667 | 45,342 | |||||||
| Total deferred tax assets | ||||||||
| Accrued vacation pay | (7,070 | ) | (7,084 | ) | ||||
| Equipment and leaseholds | (2,290 | ) | (4,488 | ) | ||||
| Other | (2,507 | ) | (1,660 | ) | ||||
| (11,867 | ) | (13,232 | ) | |||||
| Net deferred income tax liabilities | $ | 34,800 | $ | 32,110 | ||||
Deferred income tax liabilities result primarily from prepaid expenses and capitalized legal costs associated with patents that are deducted immediately for income tax purposes. Deferred income tax assets result primarily from accrued vacation pay, which is not deducted for tax purposes unless it is paid within 2½ months of each year-end, other expenses, which are not deductible for tax purposes until paid and from differences between depreciation expense for book and tax purposes.
The provision for income taxes consists of the following components:
| 2017 | 2016 | |||||||||
| Current | ||||||||||
| Federal | $ | 30,758 | $ | 30,695 | ||||||
| State | 10,245 | 10,520 | ||||||||
| 41,003 | 41,215 | |||||||||
| Deferred | 2,690 | — | ||||||||
| $ | 43,693 | $ | 41,215 | |||||||
The differences between the U.S. federal statutory tax rate and the Company’s effective tax rate are as follows:
| Year Ended April 30, | ||||||||
| 2017 | 2016 | |||||||
| U.S. federal statutory tax rate | 34.0 | % | 34.0 | % | ||||
| State income tax expense, net of federal tax benefit | 6.0 | 6.0 | ||||||
| Effect of graduated federal tax rates and other | (11.05 | ) | (12.06 | ) | ||||
| Effective tax rate | 28.95 | % | 27.94 | % | ||||