The Tax Cuts and Jobs Act of (the “New Tax Legislation”) was enacted on which significantly revised the U.S. corporate income tax code by, among other things, lowering federal corporate income tax rates, implementing a modified territorial tax system and imposing a repatriation tax, ("transition tax"), on deemed repatriated cumulative earnings of foreign subsidiaries which will be paid over years. In addition, new taxes were imposed related to foreign income, including a tax on global intangible low-taxed income (“GILTI”) as well as a limitation on the deduction for business interest expense (“Section (j)"). GILTI is the excess of the shareholder’s net controlled foreign corporations, ("CFC") net tested income over the net deemed tangible income.  The Section (j) limitation does allow the amount of deductible interest to exceed the sum of the taxpayer's business interest income, of the taxpayer’s adjusted taxable income, and the taxpayer’s floor plan financing interest expense for the year. We have included in our calculation of our effective tax rate the estimated impact of GILTI and Section (j) which were effective for us beginning fiscal year We have elected to account for the tax on GILTI as a period cost and, therefore, do record deferred taxes related to GILTI on our foreign subsidiaries.

 

In the quarter ended when the New Tax Legislation was enacted, we made reasonable estimates of the effects of the expense associated with the -time transition tax and with remeasuring net deferred tax liabilities at a lower federal corporate tax rate.  We recorded million as provisional amounts in fiscal year  Our provisional assessment of the impacts of the New Tax Legislation were finalized during the quarter of fiscal year

 

The provision for income taxes consists of the following (in thousands):

 

		Period ended
		September 28, 2019				September 29, 2018
Current:
Federal		$	732			$	4,629
State			(3	)			16
Foreign			132				121
Total current		$	861			$	4,766
Deferred:
Federal		$	(304	)		$	5,927
State			(80	)			(233	)
Total deferred			(384	)			5,694
Provision for income taxes		$	477			$	10,460

 

For financial reporting purposes our income before provision for income taxes includes the following components (in thousands):

 

		Period ended
		September 28, 2019				September 29, 2018
United States, net of loss attributable to non-controlling interest		$	(2,695	)		$	156
Foreign			11,040				11,534
		$	8,345			$	11,690

 

Our effective income tax rate on operations for fiscal year was compared to a rate of in the prior year. Excluding the additional million of expense related to the New Tax Legislation, the adjusted effective tax rate was a benefit of in fiscal year The change in the federal statutory rate from to as a result of the New Tax Legislation was effective as of part way through our fiscal year As such, the blended federal statutory tax rate for fiscal year was

 

We benefit from having income in foreign jurisdictions that are either exempt from income taxes or have tax rates that are lower than those in the United States. However, changes in the mix of U.S. taxable income compared to profits in tax-free or lower-tax jurisdictions can have a significant impact on our overall effective tax rate.  In addition, the future impact of the New Tax Legislation differ from historical amounts, possibly materially, due to, among other things, changes in interpretations and assumptions made regarding the New Tax Legislation, guidance that be issued and actions we take as a result of the New Tax Legislation.

 

A reconciliation between actual provision for income taxes and the provision for income taxes computed using the federal statutory income tax rate of for fiscal year and for fiscal year is as follows (in thousands):

 

		Period ended
		September 28, 2019				September 29, 2018
Income tax expense at the statutory rate of 21.0% and 24.3%		$	1,831			$	2,861
State income tax (benefits expense, net of federal income tax benefit			(82	)			16
New Tax Legislation:
Impact of federal rate change			—				624
Federal transition tax			109				10,039
GILTI inclusion			1,040				—
Impact of state rate changes			—				(236	)
Impact of foreign earnings in tax-free zone			(2,186	)			(2,676	)
Nondeductible amortization and other permanent differences			(140	)			(163	)
Other			(95	)			(5	)
Provision for income taxes		$	477			$	10,460

 

Significant components of our deferred tax assets and liabilities are as follows (in thousands):

 

		September 28, 2019				September 29, 2018
Deferred tax assets:
State net operating loss carryforwards		$	2,190			$	1,870
Alternative minimum tax credit carryforward			—				397
Inventories and reserves			2,960				3,277
Accrued compensation and benefits			1,789				1,881
Receivable allowances and reserves			345				371
Other			1,093				67
Gross deferred tax assets		$	8,377			$	7,863
Less valuation allowance — state net operating loss carryforwards			(516	)			(493	)
Net deferred tax assets		$	7,861			$	7,370
Deferred tax liabilities:
Depreciation			(4,611	)			(5,459	)
Goodwill and intangibles			(3,183	)			(2,529	)
Other			(72	)			(140	)
Gross deferred tax liabilities		$	(7,866	)		$	(8,128	)
Net deferred tax liabilities		$	(5	)		$	(758	)

 

As of we had state net operating losses ("NOLs") of approximately million, with deferred tax assets of million related to these state NOLs, and related valuation allowances against them of approximately million. These state net loss carryforwards expire at various intervals from through Our deferred tax asset related to state net operating loss carryforwards is reduced by a valuation allowance to result in net deferred tax assets we consider more likely than to be realized.

 

For both federal and state purposes, the ultimate realization of deferred tax assets depends upon the generation of future taxable income or tax planning strategies during the periods in which those temporary differences become deductible or when the carryforwards are available.

 

ASC (“ASC ) requires that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more-likely-than- (i.e., a likelihood of more than percent) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than likely of being realized upon ultimate settlement. Accrued interest and penalties related to unrecognized tax benefits would also be recorded. We did have any material unrecognized tax benefits as of  or

 

We file income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions. Tax years and according to statute and with few exceptions, remain open to examination by various federal, state, local, and foreign jurisdictions.