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Income Taxes | 12 Months Ended
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Feb. 01, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | 15. Income Taxes Income before income taxes was as follows for Fiscal 2019, Fiscal 2018 and Fiscal 2017:
|  | (in thousands) |
|  | Year Ended |
|  | February 1, 2020 |  |  | February 2, 2019 |  |  | February 3, 2018 (53 Weeks) |
Domestic |  | $ | 573,399 |  |  | $ | 503,290 |  |  | $ | 429,939 |
Foreign |  |  | 7,126 |  |  |  | 4,294 |  |  |  | (959 | )
Total income before income taxes |  | $ | 580,525 |  |  | $ | 507,584 |  |  | $ | 428,980 |
Income tax expense was as follows for Fiscal 2019, Fiscal 2018 and Fiscal 2017:
|  | (in thousands) |
|  | Year Ended |
|  | February 1, 2020 |  |  | February 2, 2019 |  |  | February 3, 2018 (53 Weeks) |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 83,521 |  |  | $ | 69,007 |  |  | $ | 65,824 |
State |  |  | 20,778 |  |  |  | 19,642 |  |  |  | 8,824 |
Foreign |  |  | 2,040 |  |  |  | 1,671 |  |  |  | 207 |
Subtotal |  |  | 106,339 |  |  |  | 90,320 |  |  |  | 74,855 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 8,375 |  |  |  | 8,337 |  |  |  | (40,839 | )
State |  |  | 1,012 |  |  |  | (8,409 | ) |  |  | 9,091 |
Foreign |  |  | (317 | ) |  |  | 2,591 |  |  |  | 1,021 |
Subtotal |  |  | 9,070 |  |  |  | 2,519 |  |  |  | (30,727 | )
Total Income Tax Expense |  | $ | 115,409 |  |  | $ | 92,839 |  |  | $ | 44,128 |
The tax rate reconciliations were as follows for Fiscal 2019, Fiscal 2018 and Fiscal 2017:
|  | Fiscal Year Ended |
|  | February 1, 2020 |  |  | February 2, 2019 |  |  | February 3, 2018 (53 Weeks) |
Tax at statutory rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 33.7 | %
State income taxes, net of federal |  |  | 4.0 |  |  |  | 4.2 |  |  |  | 3.0 |
Excess tax benefit from stock compensation |  |  | (5.3 | ) |  |  | (5.2 | ) |  |  | (4.4 | )
Tax credits |  |  | (1.0 | ) |  |  | (1.2 | ) |  |  | (1.4 | )
Impact of federal tax reform |  |  | — |  |  |  | — |  |  |  | (21.1 | )
Other |  |  | 1.2 |  |  |  | (0.5 | ) |  |  | 0.5 |
Effective tax rate |  |  | 19.9 | % |  |  | 18.3 | % |  |  | 10.3 | %
The increase in the effective tax rate was primarily related to the one-time tax benefit in the prior year from the deferred tax revaluation due to changes in New Jersey tax law, enacted during the second quarter of Fiscal 2018. The tax effects of temporary differences are included in deferred tax accounts as follows:
|  | (in thousands) |
|  | February 1, 2020 |  |  | February 2, 2019 |
|  | Tax Assets |  |  | Tax Liabilities |  |  | Tax Assets |  |  | Tax Liabilities |
Non-current deferred tax assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property and equipment basis adjustments |  | $ | — |  |  | $ | 171,949 |  |  | $ | — |  |  | $ | 149,705 |
Operating lease liability |  |  | 682,104 |  |  |  | — |  |  |  | — |  |  |  | — |
Operating lease asset |  |  | — |  |  |  | 645,240 |  |  |  | — |  |  |  | — |
Deferred rent |  |  | — |  |  |  | — |  |  |  | 19,496 |  |  |  | — |
Intangibles—long-lived |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 40,918 |
Intangibles—indefinite-lived |  |  | — |  |  |  | 64,842 |  |  |  | — |  |  |  | 65,197 |
Employee benefit compensation |  |  | 14,933 |  |  |  | — |  |  |  | 15,186 |  |  |  | — |
State net operating losses (net of federal benefit) |  |  | 9,346 |  |  |  | — |  |  |  | 12,290 |  |  |  | — |
Landlord allowances |  |  | — |  |  |  | — |  |  |  | 35,907 |  |  |  | — |
Tax credits |  |  | 8,154 |  |  |  | — |  |  |  | 6,140 |  |  |  | — |
Other |  |  | — |  |  |  | 274 |  |  |  | 2,651 |  |  |  | — |
Valuation allowance |  |  | (9,842 | ) |  |  | — |  |  |  | (10,268 | ) |  |  | — |
Total non-current deferred tax assets and liabilities |  | $ | 704,695 |  |  | $ | 882,305 |  |  | $ | 81,402 |  |  | $ | 255,820 |
Net deferred tax liability |  |  |  |  |  | $ | 177,610 |  |  |  |  |  |  | $ | 174,418 |
As of February 1, 2020, the Company has a deferred tax asset related to net operating losses of $9.3 million, inclusive of $9.0 million of state net operating losses which will expire at various dates between 2020 and 2039 and $0.3 million of deferred tax assets recorded for Puerto Rico net operating loss carry-forwards that will expire in 2025. As of February 1, 2020, the Company had tax credit carry-forwards of $8.2 million, inclusive of state tax credit carry-forwards of $6.8 million that will begin to expire in 2020 and $1.4 million of Puerto Rico alternative minimum tax (AMT) credits that have an indefinite life. As of February 2, 2019, the Company had a deferred tax asset related to net operating losses of $12.3 million, inclusive of $10.4 million of state net operating losses, and $1.9 million of deferred tax assets recorded for Puerto Rico net operating loss carry-forwards. As of February 2, 2019, the Company had tax credit carry-forwards of $6.1 million, inclusive of state tax credit carry-forwards of $4.5 million, and $1.6 million of Puerto Rico AMT credits. We believe that it is more likely than not that the benefit from certain state net operating loss carry forwards and credits will not be realized. In recognition of this risk, we have provided a valuation allowance of $5.6 million on state net operating losses and $3.9 million on state tax credit carry forwards. In addition, the Company believes that it is more likely than not that the benefit from Puerto Rico net operating loss carry-forwards will not be realized. As a result, we have provided for a full valuation allowance of $0.3 million. If our assumptions change and we determine we will be able to realize these net operating losses or credits, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets as of February 1, 2020 will be recorded to the Company’s Consolidated Statement of Income. As of February 2, 2019, we provided a total valuation allowance of $10.3 million, inclusive of $5.9 of valuation allowance related to state net operating losses, $2.5 million related to tax credit carry-forwards and $1.9 million related to Puerto Rico. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (exclusive of interest and penalties) is as follows:
|  | (in thousands) |
|  | Gross Unrecognized Tax Benefits, Exclusive of Interest and Penalties |
Balance at January 28, 2017 |  | $ | 9,193 |
Additions for tax positions of the current year |  |  | 72 |
Additions for tax positions of prior years |  |  | 882 |
Reduction for tax positions of prior years |  |  | (973 | )
Settlements |  |  | — |
Lapse of statute of limitations |  |  | (101 | )
Balance at February 3, 2018 |  | $ | 9,073 |
Additions for tax positions of the current year |  |  | 18 |
Additions for tax positions of prior years |  |  | 698 |
Reduction for tax positions of prior years |  |  | (782 | )
Settlements |  |  | — |
Lapse of statute of limitations |  |  | (80 | )
Balance at February 2, 2019 |  | $ | 8,927 |
Additions for tax positions of the current year |  |  | — |
Additions for tax positions of prior years |  |  | — |
Reduction for tax positions of prior years |  |  | (783 | )
Settlements |  |  | — |
Lapse of statute of limitations |  |  | (67 | )
Balance at February 1, 2020 |  | $ | 8,077 |
As of February 1, 2020, the Company reported total unrecognized benefits of $8.1 million, of which $6.4 million would affect the Company’s effective tax rate if recognized. As a result of previous positions taken and current period activity, the Company recorded a net benefit of $0.2 million of interest and penalties during Fiscal 2019 in the line item “Income tax expense” in the Company’s Consolidated Statements of Income. Cumulative interest and penalties of $12.0 million are recorded in the line item “Other liabilities” in the Company’s Consolidated Balance Sheets as of February 1, 2020. The Company recognizes interest and penalties related to unrecognized tax benefits as part of income taxes. Within the next twelve months, the Company does not expect any significant changes in its unrecognized tax benefits. As of February 2, 2019, the Company reported total unrecognized benefits of $8.9 million, of which $7.1 million would affect the Company’s effective tax rate if recognized. As a result of previous positions taken, the Company recorded an increase of $0.2 million of interest and penalties during Fiscal 2018 in the line item “Income tax expense” in the Company’s Consolidated Statements of Income. Cumulative interest and penalties of $12.3 million are recorded in the line item “Other liabilities” in the Company’s Consolidated Balan ce Sheets as of February 2, 2019. The Company files tax returns in the U.S. federal jurisdiction, Puerto Rico, and various state jurisdictions. The Company is open to examination by the IRS under the applicable statutes of limitations for Fiscal Years 2016 through 2019. The Company or its subsidiaries’ state and Puerto Rico income tax returns are open to audit for Fiscal Years 2014 through 2019, with a few exceptions, under the applicable statutes of limitations. There are ongoing state audits in several jurisdictions, and the Company has accrued for possible exposures as required under Topic No. 740. The Company does not expect the settlement of these audits to have a material impact to its financial results.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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