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Income Taxes | 12 Months Ended
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Jan. 01, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Note 7: Income Taxes Income before income taxes includes income from foreign operations of $6,656,000, $4,157,000 and $6,007,000 for fiscal 2015, 2014 and 2013, respectively. Total income tax expense for the fiscal years ended January 1, 2016, January 2, 2015 and January 3, 2014 consisted of the following:
|  | Fiscal Years |
(In thousands) |  | 2015 |  | 2014 |  | 2013 |
Current |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 25,081 |  | $ | 26,647 |  | $ | 22,468 |
Foreign |  |  | 1,385 |  |  | 896 |  |  | 1,411 |
State |  |  | 4,895 |  |  | 5,798 |  |  | 4,824 |
|  |  | 31,361 |  |  | 33,341 |  |  | 28,703 |
Deferred |  |  |  |  |  |  |  |  |  |
Federal |  |  | (3,411) |  |  | (5,059) |  |  | (2,703) |
State |  |  | (416) |  |  | (1,018) |  |  | (695) |
|  |  | (3,827) |  |  | (6,077) |  |  | (3,398) |
Total |  | $ | 27,534 |  | $ | 27,264 |  | $ | 25,305 |
The Company’s effective tax rate differs from the statutory federal tax rate of 35% as shown in the following schedule:
|  | Fiscal Years |
(In thousands) |  | 2015 |  |  | 2014 |  |  | 2013 |
Tax at federal statutory rate |  | $ | 24,897 |  |  | $ | 23,788 |  |  | $ | 22,381 |
State taxes, net of federal benefit |  |  | 2,910 |  |  |  | 3,226 |  |  |  | 2,819 |
Tax exempt interest income |  |  | (23) |  |  |  | (44) |  |  |  | (36) |
Non-deductible expenses |  |  | 261 |  |  |  | 289 |  |  |  | 226 |
Non-deductible stock-based compensation |  |  | (42) |  |  |  | - |  |  |  | (79) |
Other |  |  | (469) |  |  |  | 5 |  |  |  | (6) |
Tax expense |  | $ | 27,534 |  |  | $ | 27,264 |  |  | $ | 25,305 |
Effective tax rate |  |  | 38.7 | % |  |  | 40.1 | % |  |  | 39.6 | %
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at January 1, 2016 and January 2, 2015 are presented in the following schedule:
|  | Fiscal Years |
(In thousands) |  | 2015 |  | 2014 |
Deferred tax assets: |  |  |  |  |  |  |
Accrued liabilities and allowances |  | $ | 17,780 |  | $ | 17,244 |
Deferred compensation |  |  | 27,425 |  |  | 26,873 |
Other |  |  | 43 |  |  | 28 |
Total deferred tax assets |  |  | 45,248 |  |  | 44,145 |
Deferred tax liabilities: |  |  |  |  |  |  |
State taxes |  |  | (1,850) |  |  | (1,717) |
Deductible goodwill |  |  | (3,014) |  |  | (2,978) |
Property, equipment and leasehold improvements |  |  | (205) |  |  | (459) |
Unrealized gain of deferred compensation plan assets |  |  | (723) |  |  | (3,377) |
Other |  |  | - |  |  | - |
Total deferred tax liabilities |  |  | (5,792) |  |  | (8,531) |
Net deferred tax assets |  | $ | 39,456 |  | $ | 35,614 |
Management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the net deferred tax assets. The Company is entitled to a deduction for federal and state tax purposes with respect to employees’ stock award activity. The net deduction in taxes otherwise payable arising from that deduction has been credited to additional paid-in capital. For the fiscal years ended January 1, 2016, January 2, 2015 and January 3, 2014, the net deduction in tax payable arising from employees’ stock award activity was $6,396,000, $5,100,000 and $4,267,000, respectively. The Company and its subsidiaries file income tax returns in the United States federal jurisdiction, California and various other state and foreign jurisdictions. The Company is no longer subject to United States federal income tax examination for years prior to 2012. The Company is no longer subject to California franchise tax examinations for years prior to 2011. With few exceptions, the Company is no longer subject to state and local or non-United States income tax examination by tax authorities for years prior to 2011. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Balance at January 3, 2014 |  | $ | 1,147,000 |
Additions based on tax positions related to the current year |  |  | 486,000 |
Additions for tax positions of prior years |  |  | - |
Reductions due to lapse of statute of limitations |  |  | (87,000) |
Reductions due to change in accounting method |  |  | - |
Settlements |  |  | - |
Balance at January 2, 2015 |  | $ | 1,546,000 |
Additions based on tax positions related to the current year |  |  | 406,000 |
Additions for tax positions of prior years |  |  | 80,000 |
Reductions due to lapse of statute of limitations |  |  | (154,000) |
Reductions due to change in accounting method |  |  | - |
Settlements |  |  | - |
Balance at January 1, 2016 |  | $ | 1,878,000 |
Unrecognized tax benefits are included in other liabilities in the accompanying balance sheet. To the extent these unrecognized tax benefits are ultimately recognized, they will impact the effective tax rate by $1,296,000 in a future period. There are no uncertain tax positions whose resolution in the next 12 months is expected to materially affect operating results. Deferred income taxes have not been provided on the undistributed earnings of foreign subsidiaries in the United Kingdom, Germany, China and Hong Kong. The amount of such earnings at January 1, 2016 was $7,736,000. These earnings have been permanently reinvested and the Company does not plan to initiate any action that would precipitate the payment of income taxes thereon. The unrecognized deferred tax liability for these earnings is estimated to be approximately $1,478,000.

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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 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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