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INCOME TAXES

9 Months Ended

Mar. 27, 2019

Income Tax Disclosure [Abstract]

Income Taxes

	Thirteen Week Periods Ended						Thirty-Nine Week Periods Ended
	March 27, 2019			March 28, 2018			March 27, 2019			March 28, 2018
Effective income tax rate	10.3	%		20.4	%		11.7	%		28.7	%

Fiscal 2019

The effective income tax rate in the thirteen and thirty-nine week periods ended March 27, 2019 compared to the thirteen and thirty-nine week periods ended March 28, 2018 decreased 10.1% and 17.0% respectively, primarily due to the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) that was enacted on December 22, 2017. The Tax Act lowered the federal statutory tax rate from 35.0% to 21.0% effective January 1, 2018. Our fiscal 2019 effective income tax rate is further lowered due to the FICA tax credit benefit, partially offset by the impact of the sale leaseback transactions.

During the thirty-nine week period ended March 27, 2019, the gains related to the sale leaseback transactions, as described in Note 3 - Sale Leaseback Transactions, resulted in tax expenses of $76.0 million when the transactions were completed. Also during the thirty-nine week period ended March 27, 2019, we paid $75.0 million of the taxes, with a remaining $1.0 million included as a payable net within Income taxes receivable in the Consolidated Balance Sheets as of March 27, 2019. This liability is expected to be paid during the fourth quarter of fiscal 2019.

Fiscal 2018

The thirteen and thirty-nine week periods ended March 28, 2018 consider the Tax Act that was enacted prior to the end of the second quarter of fiscal 2018 and therefore the federal statutory tax rate changes stipulated by the Tax Act were reflected in the third quarter of fiscal 2018. Our federal statutory tax rate for fiscal 2018 was 28.1% representing a blended tax rate for fiscal 2018 based on the number of days in fiscal 2018 before and after the effective date. In accordance with ASC 740, we re-measured our deferred tax accounts as of the enactment date using the new federal statutory tax rate and recognized the change as a discrete item in the provision for income taxes. The Company’s deferred tax position was a net asset and as a result, the reduction in the federal statutory tax rate resulted in a one-time non-cash adjustment to our net deferred tax balance of $8.4 million with a corresponding increase to the provision for income taxes in the thirteen and thirty-nine week periods ended March 28, 2018.

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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

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