California Water Service Group Annual Report 2005

	2005	2006
Accrued pension and postretirement benefits	$14,272	$13,032
Accrued and deferred compensation	9,370	7,953
Accrued benefit and workers' compensation claims	4,533	4,142
Other	6,882	6,652
Total other accrued liabilities	$35,057	$31,779

Note 11. Income Taxes

Income tax expense consists of the following:

		Federal	State	Total
2005	Current	$12,275	$3,433	$15,708
	Deferred	4,274	24	4,298
	Total	$16,549	$3,457	$20,006
2004	Current	$4,211	$3,623	$7,834
	Deferred	9,146	104	9,250
	Total	$13,357	$3,727	$17,084
2003	Current	$8,506	$2,604	$11,110
	Deferred	1,697	91	1,788
	Total	$10,203	$2,695	$12,898

Income tax expense computed by applying the current federal 35% tax rate to pretax book income differs from the amount shown in the Consolidated Statements of Income. The difference is reconciled in the table below:

		2005	2004	2003
Computed "expected" tax expense		$16,530	$15,089	$11,310
Increase (reduction) in taxes due to:
	State income taxes net of federal tax benefit	2,714	2,477	1,846
	Investment tax credits	(31)	(139)	(91)
	Other	793	(343)	(167)
Total income tax		$20,006	$17,084	$12,898

Included in Other in the above table is the recognition of the flow-through accounting for federal depreciation expense on assets acquired prior to 1982. For assets acquired prior to 1982, the benefit of excess tax depreciation was previously passed through to the ratepayers. The tax benefit is now reversing and a higher tax expense is being recognized and is included in customer rates.

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