Entity information:
13.
Income Taxes

The components of the provision for income taxes for each of the three years were as follows:

  
2017
  
2016
  
2015
 
Current:
         
Federal
 
$
83,743
  
$
62,054
  
$
71,386
 
State
  
7,567
   
6,447
   
6,050
 
Deferred:
            
Federal
  
4,696
   
12,477
   
(6,178
)
State
  
982
   
(3,858
)
  
3,040
 
Total provision for income taxes
 
$
96,988
  
$
77,120
  
$
74,298
 

A reconciliation of the Company’s provision for income taxes and income taxes based on the statutory U.S. federal rate of 35% was as follows:

  
2017
  
2016
  
2015
 
Provision computed at federal statutory income tax rate
 
$
104,611
  
$
93,247
  
$
83,370
 
State and local income taxes, net of federal benefit
  
5,856
   
1,427
   
6,378
 
Employer tax credits for FICA taxes paid on employee tip income
  
(11,543
)
  
(11,048
)
  
(10,681
)
Other employer tax credits
  
(2,814
)
  
(7,326
)
  
(5,058
)
Other-net
  
878
   
820
   
289
 
Total provision for income taxes
 
$
96,988
  
$
77,120
  
$
74,298
 

Significant components of the Company’s net deferred tax liability consisted of the following at:

  
July 28, 2017
  
July 29, 2016
 
Deferred tax assets:
      
Compensation and employee benefits
 
$
10,110
  
$
13,937
 
Deferred rent
  
18,270
   
17,183
 
Accrued liabilities
  
13,233
   
12,466
 
Insurance reserves
  
12,401
   
11,444
 
Inventory
  
4,411
   
4,368
 
Other
  
2,767
   
8,718
 
Deferred tax assets
 
$
61,192
  
$
68,116
 
         
Deferred tax liabilities:
        
Property and equipment
 
$
100,373
  
$
97,695
 
Inventory
  
10,906
   
9,803
 
Other
  
12,273
   
12,024
 
Deferred tax liabilities
  
123,552
   
119,522
 
Net deferred tax liability
 
$
62,360
  
$
51,406
 

The Company believes that adequate amounts of tax, interest and penalties have been provided for potential tax uncertainties; these amounts are included in other long-term liabilities in the Consolidated Balance Sheets.  As of July 28, 2017 and July 29, 2016, the Company’s gross liability for uncertain tax positions, exclusive of interest and penalties, was $20,731 and $21,899, respectively.  Summarized below is a tabular reconciliation of the beginning and ending balance of the Company’s total gross liability for uncertain tax positions exclusive of interest and penalties:

  
July 28, 2017
  
July 29, 2016
  
July 31, 2015
 
Balance at beginning of year
 
$
21,899
  
$
25,507
  
$
22,832
 
Tax positions related to the current year:
            
Additions
  
4,003
   
4,860
   
3,994
 
Reductions
  
--
   
--
   
--
 
Tax positions related to the prior year:
            
Additions
  
582
   
2,186
   
118
 
Reductions
  
(2,966
)
  
(6,896
)
  
(227
)
Settlements
  
(1,027
)
  
(2,324
)
  
(204
)
Expiration of statute of limitations
  
(1,760
)
  
(1,434
)
  
(1,006
)
Balance at end of year
 
$
20,731
  
$
21,899
  
$
25,507
 

If the Company were to prevail on all uncertain tax positions, the reversal of this accrual would be a tax benefit to the Company and impact the effective tax rate.  The following table highlights the amount of uncertain tax positions, exclusive of interest and penalties, which, if recognized, would affect the effective tax rate for each of the three years:

  
2017
  
2016
  
2015
 
Uncertain tax positions
 
$
13,475
  
$
14,234
  
$
16,579
 

The Company had $6,128, $5,497 and $9,754 in interest and penalties accrued as of July 28, 2017, July 29, 2016, and July 31, 2015, respectively.

The Company recognized accrued interest and penalties related to unrecognized tax benefits of $631, $(4,256) and $1,194 in its provision for income taxes on July 28, 2017, July 29, 2016 and July 31, 2015, respectively.  The increase from 2016 to 2017 and the decrease from 2015 to 2016 both are attributable to the Company’s revaluation of select reserves and audit settlements in 2016.
In many cases, the Company’s uncertain tax positions are related to tax years that remain subject to examination by the relevant taxing authorities.  Based on the outcome of these examinations or as a result of the expiration of the statutes of limitations for specific taxing jurisdictions, it is reasonably possible that the related uncertain tax positions taken regarding previously filed tax returns could decrease from those recorded as liabilities for uncertain tax positions in the Company’s financial statements at July 28, 2017 by approximately $3,000 to $4,000 within the next twelve months.  At July 28, 2017, the Company was subject to income tax examinations for its U.S. federal income taxes after 2013 and for state and local income taxes generally after 2013.