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Income Taxes
 3 Months Ended
Jun. 25, 2022
Income Taxes  
Income Taxes

8. Income Taxes

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The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). In accordance with ASC 740, the Company recognizes deferred tax assets and liabilities based on the liability method, which requires an adjustment to the deferred tax asset or liability to reflect income tax rates currently in effect. When income tax rates increase or decrease, a corresponding adjustment to income tax expense is recorded by applying the rate change to the cumulative temporary differences. ASC 740 prescribes the recognition threshold and measurement principles for financial statement disclosure of tax positions taken or expected to be taken on a tax return. ASC 740 requires the Company to determine whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recognized. Additionally, ASC 740 provides guidance on recognition measurement, derecognition, classification, related interest and penalties, accounting in interim periods, disclosure and transition.

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The income tax rate was 23.5% and 20.6% for the thirteen weeks ended June 25, 2022 and June 26, 2021, respectively. The tax rate for the thirteen weeks ended June 25, 2022 was higher than the tax rate for the thirteen weeks ended June 26, 2021, primarily due to a lower tax benefit due to income tax accounting for share-based compensation compared to a higher tax benefit in the thirteen weeks ended June 26, 2021. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts expected to be realized. To this end, the Company has

considered and evaluated its sources of taxable income, including forecasted future taxable income, and has concluded that a valuation allowance is not required as of June 25, 2022. The Company will continue to evaluate the need for a valuation allowance at each period end.

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The Company’s policy is to accrue interest and penalties related to unrecognized tax benefits as a component of income tax expense. At June 25, 2022 and March 26, 2022, the Company had no accrued liability for penalties and interest.

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The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. As of June 25, 2022, the Company is not aware of tax examinations (current or potential) in any tax jurisdictions.