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Income Taxes | 12 Months Ended
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Dec. 30, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | 10. Income Taxes U.S. Tax Reform: Tax Cuts and Jobs Act On December 22, 2017, the Tax Cuts and Jobs Act (the "TCJA") was enacted in the United States. The TCJA represents sweeping changes in U.S. tax law. Among the numerous changes in tax law, the TCJA permanently reduces the U.S. corporate income tax rate to 21% beginning in 2018; allows 100% expensing for qualified property placed in service after September 27, 2017; imposes a one-time transition tax on deferred foreign earnings; establishes a participation exemption system by allowing a 100% dividends received deduction on qualifying dividends paid by foreign subsidiaries; limits deductions for net interest expense; and expands the U.S. taxation of foreign earned income to include "global intangible low taxed income". The TCJA represents the first significant change in U.S. tax law in over 30 years. In response to the TCJA, the Staff of the U.S. Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 ("SAB No. 118") to provide guidance to registrants in applying ASC Topic 740 in connection with the TCJA. SAB No. 118 provides that in the period of enactment, the income tax effects of the TCJA may be reported as a provisional amount based on a reasonable estimate (to the extent a reasonable estimate can be determined), which would be subject to adjustment during a "measurement period". The measurement period begins in the reporting period of the TCJA's enactment and ends when a registrant has obtained, prepared, and analyzed the information that was needed in order to complete the accounting requirements under ASC Topic 740. SAB No. 118 also describes supplemental disclosures that should accompany the provisional amounts. As permitted by SAB No. 118, the net tax expense recorded in our financial statements for the fourth fiscal quarter of 2017 due to the enactment of the TCJA is considered "provisional," based on reasonable estimates. We are continuing to collect and analyze detailed information about the earnings and profits of our non-U.S. subsidiaries, the related taxed paid and the associated impact of these items under the TCJA. We may record adjustments to refine those estimates during the measurement period, as additional analysis is completed. Furthermore, we are continuing to evaluate the TCJA's provisions and may prospectively adjust our financial structure and business practices accordingly As a result of the TCJA, we recognized a provisional tax expense of $4.4 million to remeasure our net deferred tax assets at the lower 21% rate. The TCJA transitions the U.S. from a worldwide tax system to a territorial tax system. Under previous law, companies could indefinitely defer U.S. income taxation on unremitted foreign earnings. The TCJA imposes a one-time transition tax on deferred foreign earnings of 15.5% for liquid assets and 8% for illiquid assets, payable in defined increments over eight years. As a result of this requirement, we recognized no provisional tax expense and will continue collecting additional information about earnings and profits of our non-U.S. subsidiaries. The components of the income tax provision (benefit) are as follows:
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 56,641 |  |  | $ | 61,251 |  |  | $ | 55,140 |
State |  |  | 8,293 |  |  |  | 5,948 |  |  |  | 3,578 |
Foreign |  |  | 379 |  |  |  | - |  |  |  | - |
|  |  | 65,313 |  |  |  | 67,199 |  |  |  | 58,718 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 4,582 |  |  |  | (4,563 | ) |  |  | (4,874 | )
State |  |  | 343 |  |  |  | (325 | ) |  |  | (232 | )
Foreign |  |  | (249 | ) |  |  | - |  |  |  | - |
|  |  | 4,676 |  |  |  | (4,888 | ) |  |  | (5,106 | )
Total |  | $ | 69,989 |  |  | $ | 62,311 |  |  | $ | 53,612 |
The following is a reconciliation of income taxes at the statutory tax rate to the Company's effective tax rate:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Federal taxes at statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State taxes, net of federal tax benefit |  |  | 3.4 |  |  |  | 2.2 |  |  |  | 1.8 |
Research and development tax credit |  |  | (0.3 | ) |  |  | (0.2 | ) |  |  | (0.2 | )
Tax reform |  |  | 2.5 |  |  |  | - |  |  |  | - |
Other |  |  | (1.0 | ) |  |  | — |  |  |  | 0.1 |
Effective tax rate |  |  | 39.6 | % |  |  | 37.0 | % |  |  | 36.7 | %
At December 30, 2017, we had $2.3 million of unrecognized tax benefits, $2.0 million of which would affect our effective tax rate if recognized. The following table summarizes the change in uncertain tax benefits for the three years ended December 30, 2017:
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Balance at beginning of year |  | $ | 3,567 |  |  | $ | 1,855 |  |  | $ | 1,163 |
Reductions due to lapses in statutes of limitations |  |  | (181 | ) |  |  | — |  |  |  | — |
Reductions due to tax positions settled |  |  | (4,543 | ) |  |  | (109 | ) |  |  | (177 | )
Reductions due to reversals of prior year positions |  |  | — |  |  |  | (212 | ) |  |  | (20 | )
Additions based on tax positions taken during the prior period |  |  | 3,005 |  |  |  | — |  |  |  | — |
Additions based on tax positions taken during the current period |  |  | 453 |  |  |  | 2,033 |  |  |  | 889 |
Balance at end of year |  | $ | 2,301 |  |  | $ | 3,567 |  |  | $ | 1,855 |
We recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 30, 2017, we had approximately $0.7 million of accrued interest and penalties related to uncertain tax positions. Deferred income taxes result from timing differences in the recognition of revenue and expense for tax and financial statement purposes. The sources of temporary differences are as follows:
(in thousands) |  | December 30, 2017 |  |  | December 31, 2016 |
Assets: |  |  |  |  |  |  |  |
Inventories |  | $ | 7,335 |  |  | $ | 10,337 |
Accounts receivable |  |  | 11,732 |  |  |  | 20,216 |
Accrued expenses |  |  | 1,664 |  |  |  | 2,935 |
Other |  |  | 261 |  |  |  | 786 |
Gross deferred tax assets |  |  | 20,992 |  |  |  | 34,274 |
Liabilities: |  |  |  |  |  |  |  |
Depreciation |  |  | 7,936 |  |  |  | 11,988 |
Goodwill and intangible assets |  |  | 11,776 |  |  |  | 9,857 |
Gross deferred tax liabilities |  |  | 19,712 |  |  |  | 21,845 |
Net deferred tax assets |  | $ | 1,280 |  |  | $ | 12,429 |
Based on our history of taxable income and our projection of future earnings, we believe that it is more likely than not that sufficient taxable income will be generated in the foreseeable future to realize the remaining net deferred tax assets. We file income tax returns in the United States, China and Mexico. All years before 2014 are closed for federal tax purposes. We are currently under examination by one state tax authority for years 2011-2012. Tax years before 2011 are closed for the remaining states in which we file. We filed tax returns in Sweden through 2012 and all years prior to 2010 are closed. It is reasonably possible that audit settlements, the conclusion of current examinations or the expiration of the statute of limitations could impact the Company’s unrecognized tax benefits.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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