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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Taxes [Abstract] |
Income Taxes | 6. Income TaxesIncome before income taxes, classified by source of income, was as follows: Year ended December 31, 2021 2020 2019Domestic$ 818,057 $ 311,021 $ 465,253Foreign (5,294) (17,240) (6,968)Income before income taxes$ 812,763 $ 293,781 $ 458,285 The components of the benefit/(provision) for income taxes were as follows: Year ended December 31, 2021 2020 2019Current tax: U.S. Federal $ (156,447) $ 204,063 $ (57,020)U.S. State (15,351) (32,684) (20,499)Foreign (338) (1,044) (646) (172,136) 170,335 (78,165)Deferred tax: U.S. Federal 33,004 (120,066) (27,231)U.S. State (20,404) 11,507 (2,740)Foreign 7,229 7,158 2,685 19,829 (101,401) (27,286)Valuation allowance (7,472) (6,949) (2,676)Benefit/(provision) for income taxes $ (159,779) $ 61,985 $ (108,127) The effective tax rate differs from the statutory tax rates as follows: Year ended December 31, 2021 2020 2019Statutory U.S. federal income tax rate 21.0% 21.0% 21.0%State income tax, net of related federal income tax benefit 3.5 4.2 4.1 Federal credits (1.6) (3.5) (1.7) Executive compensation disallowed 2.9 2.9 2.0 Meals and entertainment - 0.1 0.1 Enhanced deduction for food donation - (0.1) - Valuation allowance 0.3 1.6 0.5 Other - 1.8 0.8 Return to provision and other discrete items 0.1 2.1 0.1 Equity compensation related adjustments (4.7) (13.5) (3.3) Federal net operating loss (1.8) (37.7) - Effective income tax rate 19.7% (21.1)% 23.6% The effective tax rate for the year ended December 31, 2021, was higher than the effective tax rate for the year ended December 31, 2020, primarily due to fewer net excess benefits generated from a federal net operating loss (“NOL”) and the proportionality of excess tax benefits related to option exercises and equity vesting relative to profit before tax in each respective year. This is partially offset by a net reduction in tax expense mostly related to the write-off of uncertain tax position reserves.The components of the deferred income tax assets and liabilities for continuing operations were as follows: December 31, 2021 2020Deferred income tax liability: Leasehold improvements, property and equipment, net $ 279,586 $ 298,225Goodwill and other assets 1,728 1,628Prepaid assets and other 106 (350)Operating lease assets 851,324 752,864Total deferred income tax liability 1,132,744 1,052,367Deferred income tax asset: Gift card liability 9,699 3,849Capitalized transaction costs 324 324Stock-based compensation and other employee benefits 45,261 34,709Foreign net operating loss carry-forwards 27,446 21,598State credits 3,595 4,452Operating lease liabilities 909,528 812,699Allowances, reserves and other 24,179 25,981State net operating loss carry-forwards 1,568 22,482Valuation allowance (30,621) (23,149)Total deferred income tax asset 990,979 902,945Deferred income tax liabilities $ 141,765 $ 149,422 Gross foreign NOLs were $108,324 and $98,710 for the year ended December 31, 2021 and 2020, respectively. Our foreign NOLs can be carried forward indefinitely.Gross state NOLs available across all jurisdictions in which we operate were $50,467 and $340,259 as of December 31, 2021 and 2020, respectively. Our state NOLs expire over varying intervals in the future.We had gross valuation allowances against certain foreign deferred tax assets of $119,741 and $104,820 as of December 31, 2021 and 2020, respectively. The increase in the valuation allowance was primarily due to the recording of a valuation allowance on various foreign tax attributes. Unrecognized Tax BenefitsA reconciliation of the unrecognized tax benefits was as follows: Year ended December 31, 2021 2020 2019Beginning of year$ 10,859 $ 15,028 $ 9,360(Decrease)/Increase resulting from prior year tax position (151) (2,853) 5,855Increase resulting from current year tax position 1,387 1,870 758Settlements with taxing authorities - - (736)Lapsing of statutes of limitations (6,833) (3,186) (209)End of year$ 5,262 $ 10,859 $ 15,028 Interest expense related to uncertain tax positions is recognized in interest and other income, net on the consolidated statements of income. Penalties related to uncertain tax positions are recognized in benefit/(provision) for income taxes on the consolidated statements of income. For the years ended December 31, 2021, 2020 and 2019, we recognized $180, $554 and $1,853, respectively, in interest expense related to uncertain tax positions. These are gross amounts before any tax benefits and are included in other liabilities on the consolidated balance sheets. As of December 31, 2021 and 2020, we have accrued interest of $356 and $2,185, respectively.We are no longer subject to U.S. federal tax examinations by tax authorities for tax years before 2017. For the majority of states where we have a significant presence, we are no longer subject to tax examinations by tax authorities for tax years before 2017. Currently, we expect expirations of statutes of limitations, excluding indemnified amounts, on reserves of approximately $826 within the next twelve months.It is reasonably possible the amount of the unrecognized benefit with respect to certain unrecognized positions could significantly increase or decrease within the next twelve months and would have an impact on net income.Coronavirus Aid, Relief and Economic Security Act (“CARES Act”)On March 27, 2020, President Trump signed into law the CARES Act. Intended to provide economic relief to those impacted by the COVID-19 pandemic, the CARES Act includes provisions, among others, addressing the carryback of NOLs for specific periods, refunds of alternative minimum tax credits, temporary modifications to the limitations placed on the tax deductibility of net interest expenses, and technical amendments for qualified improvement property (“QIP”). Additionally, the CARES Act, in efforts to enhance business’ liquidity, provides for refundable employee retention tax credits and the deferral of the employer-paid portion of social security taxes. In connection with the CARES Act, we carried back the federal NOL generated in 2020 to tax years 2015-2017 when the corporate federal income tax rate was 35%. As a result, for the year ended December 31, 2021 and December 31, 2020, we recorded an income tax benefit of $14,431 and $110,765 respectively, due to the federal income tax rate differential in 2020 of 21% versus 2015-2017 of 35%.The CARES Act provides for the deferral of the employer-paid portion of social security payroll taxes. We elected to defer the employer-paid portion of social security payroll taxes through December 31, 2020, of $70,812 and early remitted all deferred amounts to the IRS during the year ended December 31, 2021.The CARES Act provided refundable employee retention credits, which could be used to offset payroll tax liabilities. For the year ended December 31, 2020, we recorded a benefit of $3,403, which primarily offsets payroll tax expense. On March 11, 2021, President Biden signed the American Rescue Plan Act (“ARPA”). The ARPA includes several provisions, such as measures that extend and expand the employee retention credit, previously enacted under the CARES Act, through December 31, 2021. During the year ended December 31, 2021, we recorded an employee retention credit of $11,445 which primarily offset payroll tax expense.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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