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Income Taxes | 12 Months Ended
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Dec. 25, 2018
Income Taxes |
Income Taxes | (9) Income Taxes Components of our income tax provision for the years ended December 25, 2018, December 26, 2017 and December 27, 2016 are as follows:
|  | Fiscal Year Ended |
|  | December 25, 2018 |  | December 26, 2017 |  | December 27, 2016 |
Current: |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 2,934 |  | $ | 43,108 |  | $ | 36,201 |
State |  |  | 8,794 |  |  | 10,233 |  |  | 8,786 |
Foreign |  |  | 210 |  |  | 309 |  |  | 202 |
Total current |  |  | 11,938 |  |  | 53,650 |  |  | 45,189 |
Deferred: |  |  |  |  |  |  |  |  |  |
Federal |  |  | 11,909 |  |  | (4,830) |  |  | 5,364 |
State |  |  | 410 |  |  | (239) |  |  | 630 |
Total deferred |  |  | 12,319 |  |  | (5,069) |  |  | 5,994 |
Income tax provision |  | $ | 24,257 |  | $ | 48,581 |  | $ | 51,183 |
Our pre-tax income is substantially derived from domestic restaurants. A reconciliation of the statutory federal income tax rate to our effective tax rate for December 25, 2018, December 26, 2017 and December 27, 2016 is as follows:
|  |  | Fiscal Year Ended |
|  |  | December 25, 2018 |  | December 26, 2017 |  | December 27, 2016 |
Tax at statutory federal rate |  |  | 21.0 | % | 35.0 | % | 35.0 | %
State and local tax, net of federal benefit |  |  | 3.6 |  | 3.3 |  | 3.4 |
FICA tip tax credit |  |  | (9.6) |  | (7.0) |  | (6.8) |
Work opportunity tax credit |  |  | (1.5) |  | (0.9) |  | (0.8) |
Stock compensation |  |  | (1.4) |  | (1.8) |  | (0.1) |
Net income attributable to noncontrolling interests |  |  | (0.8) |  | (1.1) |  | (0.9) |
Officers compensation |  |  | 1.7 |  | 0.1 |  | 0.1 |
Tax reform |  |  | — |  | (1.7) |  | — |
Other |  |  | (0.1) |  | 0.2 |  | (0.1) |
Total |  |  | 12.9 | % | 26.1 | % | 29.8 | %
Our effective tax rate decreased to 12.9% in 2018 compared to 26.1% in 2017 primarily due to new tax legislation enacted in late 2017. As a result of the new tax legislation, significant tax changes were enacted including a reduction of the federal corporate tax rate from 35.0% to 21.0% and changes in the federal taxes paid on foreign sourced earnings. Our effective tax rate decreased to 26.1% in 2017 compared to 29.8% in 2016 primarily due to the adoption of Accounting Standards Update 2016-09, Compensation – Stock Compensation ("ASU 2016-09") and new tax legislation that was enacted in late 2017. As a result of the new guidance requirements, excess tax benefits and tax deficiencies from share-based compensation are recognized within the income tax provision. During 2017, we recognized $3.4 million, or $0.05 per share, as an income tax benefit related to the new guidance requirements. Also during 2017, as a result of the new tax legislation, we recognized $3.1 million, or $0.04 per share, as an income tax benefit which includes an income tax benefit of approximately $3.8 million to revalue our deferred tax balances as of the enactment date and an income tax expense of approximately $0.7 million related to our foreign operations. During the first quarter of 2017, we adopted ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which required deferred tax assets and liabilities to be classified as noncurrent on our consolidated balance sheets. We adopted ASU 2015-17 on a prospective basis. Components of deferred tax liabilities, net are as follows:
|  | December 25, 2018 |  | December 26, 2017 |
Deferred tax assets: |  |  |  |  |  |  |
Deferred revenue—gift cards |  | $ | 12,851 |  | $ | 10,355 |
Insurance reserves |  |  | 3,949 |  |  | 3,638 |
Other reserves |  |  | 890 |  |  | 621 |
Share-based compensation |  |  | 4,623 |  |  | 6,022 |
Deferred rent |  |  | 12,179 |  |  | 10,338 |
Deferred compensation |  |  | 8,483 |  |  | 6,737 |
Other assets |  |  | 2,212 |  |  | 1,866 |
Total deferred tax asset |  |  | 45,187 |  |  | 39,577 |
Deferred tax liabilities: |  |  |  |  |  |  |
Property and equipment |  |  | (50,513) |  |  | (35,430) |
Goodwill and intangibles |  |  | (5,398) |  |  | (4,697) |
Other liabilities |  |  | (6,544) |  |  | (4,751) |
Total deferred tax liability |  |  | (62,455) |  |  | (44,878) |
Net deferred tax liability |  | $ | (17,268) |  | $ | (5,301) |
We have not provided any valuation allowance as we believe the realization of our deferred tax assets is more likely than not. A reconciliation of the beginning and ending liability for unrecognized tax benefits, all of which would impact the effective tax rate if recognized, is as follows:
Balance at December 27, 2016 |  | $ | 511 |
Additions to tax positions related to prior years |  |  | 36 |
Additions to tax positions related to current year |  |  | 389 |
Reductions due to statute expiration |  |  | (2) |
Reductions due to exam settlements |  |  | (128) |
Balance at December 26, 2017 |  |  | 806 |
Additions to tax positions related to prior years |  |  | 36 |
Additions to tax positions related to current year |  |  | 754 |
Reductions due to statute expiration |  |  | (114) |
Reductions due to exam settlement |  |  | — |
Balance at December 25, 2018 |  | $ | 1,482 |
As of December 25, 2018 and December 26, 2017, the total amount of accrued penalties and interest related to uncertain tax provisions was not material. All entities for which unrecognized tax benefits exist as of December 25, 2018 possess a December tax year-end. As a result, as of December 25, 2018, the tax years ended December 29, 2015, December 27, 2016 and December 26, 2017 remain subject to examination by all tax jurisdictions. As of December 25, 2018, no audits were in process by a tax jurisdiction that, if completed during the next twelve months, would be expected to result in a material change to our unrecognized tax benefits. Additionally, as of December 25, 2018, no event occurred that is likely to result in a significant increase or decrease in the unrecognized tax benefits through December 31, 2019.

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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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