Entity information:
INCOME TAXES
 
The U.S. and foreign income before income taxes for the respective years consisted of the following:

 
2017
 
2016
 
2015
United States
$
41,463

 
$
28,881

 
$
11,886

Foreign
6,747

 
(5,226
)
 
3,867

 
$
48,210

 
$
23,655

 
$
15,753



Income tax expense for the respective years consisted of the following:

 
2017
 
2016
 
2015
Current:
 
 
 
 
 
Federal
$
13,154

 
$
9,471

 
$
4,916

State
2,361

 
1,492

 
882

Foreign
1,455

 
986

 
1,469

Deferred
(3,917
)
 
(1,795
)
 
(2,130
)
 
$
13,053

 
$
10,154

 
$
5,137



The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at the end of the respective years are presented below:

 
2017
 
2016
Deferred tax assets:
 
 
 
Inventories
$
2,263

 
$
2,041

Compensation
14,260

 
13,956

Tax credit carryforwards
8,203

 
4,691

Net operating loss carryforwards
5,844

 
7,628

Other
8,041

 
7,558

Total gross deferred tax assets
38,611

 
35,874

Less valuation allowance
8,613

 
10,215

Deferred tax assets
29,998

 
25,659

Deferred tax liabilities:
 

 
 

Goodwill and other intangibles
1,805

 
1,571

Depreciation and amortization
6,802

 
5,744

Foreign statutory reserves
604

 
497

Net deferred tax assets
$
20,787

 
$
17,847


 
The net deferred tax assets recorded in the accompanying Consolidated Balance Sheet as of the years ended September 29, 2017 and September 30, 2016 were as follows:

 
2017
 
2016
Non-current assets
$
22,632

 
$
19,063

Non-current liabilities
1,845

 
1,216

Net deferred tax assets
$
20,787

 
$
17,847



The significant differences between the statutory federal tax rate and the effective income tax rates for the Company for the respective years shown below were as follows:

 
2017
 
2016
 
2015
Statutory U.S. federal income tax rate
35.0
 %
 
35.0
 %
 
35.0
 %
Foreign rate differential
(1.1
)%
 
0.3
 %
 
(1.5
)%
State income tax, net of federal benefit
4.0
 %
 
6.1
 %
 
2.4
 %
Tax credit
(0.9
)%
 
(3.2
)%
 
(16.6
)%
Deferred tax asset valuation allowance
(0.3
)%
 
0.8
 %
 
10.0
 %
Uncertain tax positions, net of settlements
0.9
 %
 
1.4
 %
 
1.7
 %
Goodwill impairment
—
 %
 
6.6
 %
 
—
 %
Section 199 manufacturer's deduction
(2.8
)%
 
(4.2
)%
 
(3.7
)%
Taxes related to foreign income, net of credits
(8.7
)%
*
0.5
 %

(0.8
)%
Amended tax returns
—
 %
 
—
 %
 
3.5
 %
Other
1.0
 %
 
(0.4
)%
 
2.6
 %
 
27.1
 %
 
42.9
 %
 
32.6
 %

* Rate benefit is primarily from excess foreign tax credits generated by a dividend repatriation in the first quarter of fiscal 2017.

The Company’s net operating loss carryforwards and their expirations as of September 29, 2017 were as follows:

 
State
 
Foreign
 
Total
Year of expiration
 
 
 
 
 
2018-2022
$
—

 
$
2,336

 
$
2,336

2023-2027
3,071

 
2,605

 
5,676

2028-2032
16,968

 
—

 
16,968

2033-2037
312

 
—

 
312

Indefinite
—

 
9,631

 
9,631

Total
$
20,351

 
$
14,572

 
$
34,923



The Company has tax credit carryforwards as follows:

 
State
 
Federal
 
Total
Year of expiration
 
 
 
 
 
2018-2022
$
1,783

 
$
—

 
$
1,783

2023-2027
1,536

 
3,894

 
5,430

2028-2032
751

 
—

 
751

2033-2037
239

 
—

 
239

Indefinite
—

 
—

 
—

Total
$
4,309

 
$
3,894

 
$
8,203


 
A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:

Balance at October 2, 2015
$
3,881

Settlement
—

Lapse of statute of limitations
(391
)
Gross increases - tax positions in  period
1,606

Balance at September 30, 2016
$
5,096

Settlement
(81
)
Lapse of statute of limitations
(380
)
Gross increases - tax positions in  period
854

Balance at September 29, 2017
$
5,489


 
The total accrued interest and penalties with respect to income taxes was approximately $1,325 and $1,079 for the years ended September 29, 2017 and September 30, 2016, respectively.  The Company’s liability for unrecognized tax benefits as of September 29, 2017 was $5,489, and if recognized, $5,094 would have an effective tax rate impact.

In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense.  Interest and penalties of $185, $194 and $148 were recorded as a component of income tax expense in the accompanying Consolidated Statements of Operations during fiscal years 2017, 2016 and 2015, respectively.

The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. At September 29, 2017, the Company was under income tax examination in Italy. The amount of unrecognized tax benefits recognized within the next twelve months may decrease due to expiration of the statute of limitations for certain years in various jurisdictions.  However, it is possible that a jurisdiction may open an audit prior to the statute expiring or the aforementioned audit may result in adjustments to the Company’s tax filings.  At this time, an estimate of the range of the reasonably possible change cannot be made.

The following tax years remain subject to examination by the Company's respective major tax jurisdictions:

Jurisdiction
Fiscal Years
United States
2014-2017
Canada
2013-2017
France
2014-2017
Germany
2013-2017
Italy
2012-2017
Switzerland
2007-2017


The Company has not provided additional U.S. income taxes on $112,638 of undistributed earnings of consolidated foreign subsidiaries included in shareholders’ equity attributable to the Company.  Such earnings could become taxable upon the sale or liquidation of these foreign subsidiaries or upon dividend repatriation.  If at some future date, these earnings cease to be indefinitely reinvested and are repatriated, the Company may be subject to additional U.S. income taxes and foreign withholding and other taxes on such amounts.  It is not practicable to estimate the amount of unrecognized withholding taxes and deferred tax liability on such earnings.

As of September 29, 2017, the Company held approximately $39,205 of cash and cash equivalents in bank accounts in foreign jurisdictions.