XML 33 R17.htm IDEA: XBRL DOCUMENT v3.25.0.1
INCOME TAXES
 3 Months Ended
Dec. 28, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
At the end of each reporting period, TD Group makes an estimate of its annual effective income tax rate. The estimate used in the year-to-date period may change in subsequent periods.
During the thirteen week periods ended December 28, 2024 and December 30, 2023, the effective income tax rate was 20.4% and 21.7%, respectively. The Company’s lower effective income tax rate for the thirteen week period ended December 28, 2024 was primarily due to a less significant impact on the rate from the valuation allowance applicable to the Company's net interest deduction limitation carryforward. The Company’s effective income tax rate for the thirteen week period ended December 28, 2024 was slightly lower than the federal statutory tax rate of 21% primarily due to the discrete impact of excess tax benefits associated with share-based payments offset by an increase in the valuation allowance applicable to the Company’s net interest deduction limitation.
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions. The Company is no longer subject to U.S. federal examinations for years before fiscal 2018. The Company is currently under examination for its federal income taxes in Canada for fiscal years 2013 through 2019, in France for fiscal years 2020 through 2022, and in Germany for fiscal years 2017 through 2019. In addition, the Company is subject to state income tax examinations for fiscal years 2015 and later.
Unrecognized tax benefits at December 28, 2024 and September 30, 2024, the recognition of which would have an impact on the effective tax rate for each fiscal year, amounted to $13 million and $14 million, respectively. The Company classifies all income tax-related interest and penalties as income tax expense, which were not significant for the thirteen week periods ended December 28, 2024 and December 30, 2023. As of December 28, 2024 and September 30, 2024, the Company accrued $4 million for the potential payment of interest and penalties. Within the next twelve months, it is reasonably possible that unrecognized tax benefits could be reduced by approximately $2 million resulting primarily from the resolution of tax examinations. Any increase in the amount of unrecognized tax benefits within the next twelve months is not expected to be material.
The Organization for Economic Co-operation and Development (the “OECD”) has proposed a framework comprised of rules and models, collectively referred to as Pillar Two (“P2”), that are designed to ensure that certain multi-national enterprises pay a minimum tax rate of 15% on reported profits arising in each jurisdiction where they operate. Although the OECD provided a framework for applying the minimum tax, individual countries have and may continue to enact P2 rules that are different than the OECD framework. While we continue to monitor P2 developments, we do not anticipate that P2 will have a material impact on our financial position in either the near nor the long-term.