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Income Taxes
 3 Months Ended
Jul. 01, 2023
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 24.6% and 23.5% for the thirteen weeks ended July 1, 2023 and June 25, 2022, respectively. The tax rate for the thirteen weeks ended July 1, 2023 was higher than the tax rate for the thirteen weeks ended June 25, 2022, primarily due to a lower tax benefit due to income tax accounting for stock-based compensation compared to the thirteen weeks ended June 25, 2022. 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 July 1, 2023. 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 July 1, 2023 and April 1, 2023, 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 July 1, 2023, the Company is not aware of tax examinations (current or potential) in any tax jurisdictions.