XML 31 R20.htm IDEA: XBRL DOCUMENT v3.23.2
Income Taxes
 9 Months Ended
Jun. 03, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
During the thirty-nine-week period ended June 3, 2023, there were no material changes in unrecognized tax benefits.
The United States government enacted the CARES Act to provide certain relief as a result of the COVID-19 pandemic. The CARES Act provides tax relief, along with other stimulus measures, including the ERC, which allows for employers to claim a refundable tax credit against the employer share of Social Security tax equal to 50% of qualified wages paid to qualified employees between March 13, 2020 and December 31, 2020 and 70% of qualified wages paid to qualified employees after December 31, 2020 through September 30, 2021. The ERC was designed to encourage businesses to keep employees on the payroll during the COVID-19 pandemic. During the thirty-nine weeks ended June 3, 2023, the Company received $12,664 related to ERC claims previously submitted. As there is no authoritative guidance under accounting principles generally accepted in the United States of America on accounting for government assistance to for-profit business entities, the Company accounts for the ERC by analogy to International Accounting Standard 20, Accounting for Government Grants and Disclosure of Government Assistance. Management determined the probability threshold has not been met for $11,695 of the funds received, and, as such, that portion of the funds was recorded in Accrued expenses and other current liabilities in the unaudited Condensed Consolidated Balance Sheet as of June 3, 2023.
The Company is currently under review by the United States Internal Revenue Service for employment tax matters, which includes the time period under which the ERC claims were submitted.
The CARES Act provides for the deferral of the employer-paid portion of social security payroll taxes. The Company elected to defer the employer-paid portion of social security payroll taxes through December 31, 2020 of $18,887. Of this amount, half was remitted in December 2021 and the remaining half was remitted in December 2022.
The Company’s effective tax rate was 24.9% for the thirty-nine-week period ended June 3, 2023, as compared to 24.7% for the thirty-nine-week period ended May 28, 2022. The effective tax rate is higher than the Federal statutory tax rate primarily due to state taxes.