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Income Taxes | 12 Months Ended
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Dec. 29, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Note 7: Income Taxes Income before income taxes includes income from foreign operations of $10,353,000, $10,646,000 and $12,326,000 for 2023, 2022 and 2021, respectively. Total income tax expense for 2023, 2022 and 2021 consisted of the following:
|  | Fiscal Years |
(In thousands) |  | 2023 |  |  | 2022 |  |  | 2021 |
Current |  |  |  |  |  |  |  |  |
Federal |  | $ | 23,193 |  |  | $ | 24,411 |  |  | $ | 19,800 |
Foreign |  |  | 2,254 |  |  |  | 1,973 |  |  |  | 2,252 |
State |  |  | 10,025 |  |  |  | 10,883 |  |  |  | 8,588 |
|  |  | 35,472 |  |  |  | 37,267 |  |  |  | 30,640 |
Deferred |  |  |  |  |  |  |  |  |
Federal |  |  | (775 | ) |  |  | (4,910 | ) |  |  | (3,930 | )
State |  |  | 860 |  |  |  | (2,453 | ) |  |  | (2,075 | )
|  |  | 85 |  |  |  | (7,363 | ) |  |  | (6,005 | )
Total |  | $ | 35,557 |  |  | $ | 29,904 |  |  | $ | 24,635 |
The Company’s effective tax rate differs from the statutory federal tax rate of 21% as shown in the following schedule:
|  | Fiscal Years |
(In thousands) |  | 2023 |  |  | 2022 |  |  | 2021 |
Tax at federal statutory rate |  | $ | 28,538 |  |  | $ | 27,769 |  |  | $ | 26,426 |
State taxes, net of federal benefit |  |  | 8,587 |  |  |  | 6,726 |  |  |  | 5,174 |
Non-deductible officer compensation |  |  | 870 |  |  |  | 1,160 |  |  |  | 997 |
Non-deductible expenses |  |  | 456 |  |  |  | 52 |  |  |  | 19 |
Non-deductible stock-based compensation |  |  | 12 |  |  |  | 12 |  |  |  | 13 |
Excess tax benefit from equity incentive plans |  |  | (2,844 | ) |  |  | (4,533 | ) |  |  | (7,850 | )
Difference between statutory rate and foreign effective tax rate |  |  | (264 | ) |  |  | (693 | ) |  |  | (622 | )
Other |  |  | 202 |  |  |  | (589 | ) |  |  | 478 |
Tax expense |  | $ | 35,557 |  |  | $ | 29,904 |  |  | $ | 24,635 |
Effective tax rate |  |  | 26.2 | % |  |  | 22.6 | % |  |  | 19.6 | %
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 29, 2023 and December 30, 2022 are presented in the following schedule:
|  | Fiscal Years |
(In thousands) |  | 2023 |  |  | 2022 |
Deferred tax assets: |  |  |  |  |  |
Accrued liabilities and allowances |  | $ | 21,235 |  |  | $ | 20,740 |
Deferred compensation plan |  |  | 40,280 |  |  |  | 36,819 |
Operating leases |  |  | 7,853 |  |  |  | 5,386 |
Unrealized loss on trading securities |  |  | — |  |  |  | 453 |
Property, equipment and leasehold improvements |  |  | — |  |  |  | 212 |
Other |  |  | — |  |  |  | 88 |
Total deferred tax assets |  | $ | 69,368 |  |  | $ | 63,698 |
Deferred tax liabilities: |  |  |  |  |  |
State taxes |  | $ | (2,255 | ) |  | $ | (2,265 | )
Deductible goodwill |  |  | (2,071 | ) |  |  | (2,138 | )
Operating leases |  |  | (7,853 | ) |  |  | (5,386 | )
Unrealized gain of deferred compensation plan assets |  |  | (1,652 | ) |  |  | — |
Property, equipment and leasehold improvements |  |  | (1,695 | ) |  |  | — |
Other |  |  | (18 | ) |  |  | — |
Total deferred tax liabilities |  |  | (15,544 | ) |  |  | (9,789 | )
Net deferred tax assets |  | $ | 53,824 |  |  | $ | 53,909 |
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 recorded as an income tax benefit. For 2023, 2022 and 2021, the net deduction in tax payable arising from employees’ stock award activity was $3,620,000, $5,829,000 and $10,009,000, 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 2020. The Company is no longer subject to California franchise tax examinations for years prior to 2019. 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 2019. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Balance at December 31, 2021 |  | $ | 1,949 |
Additions based on tax positions related to the current year |  |  | 630 |
Reductions due to lapse of statute of limitations |  |  | (532 | )
Balance at December 30, 2022 |  | $ | 2,047 |
Additions based on tax positions related to the current year |  |  | 571 |
Reductions due to lapse of statute of limitations |  |  | (473 | )
Balance at December 29, 2023 |  | $ | 2,145 |
Unrecognized tax benefits are included in other liabilities in the accompanying consolidated balance sheets. To the extent these unrecognized tax benefits are ultimately recognized, they will impact the effective tax rate by $1,695,000 in a future period. There are no uncertain tax positions whose resolution in the next 12 months is expected to materially affect operating results.

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