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Note 8 - Income Taxes | 12 Months Ended
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May 02, 2020
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | 8. INCOME TAXES The provision for income taxes consisted of the following:
|  | (In thousands) |
|  | Fiscal |  |  | Fiscal |  |  | Fiscal |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Current |  | $ | 40,647 |  |  | $ | 39,673 |  |  | $ | 55,039 |
Deferred |  |  | (1,164 | ) |  |  | 3,351 |  |  |  | 676 |
Total |  | $ | 39,483 |  |  | $ | 43,024 |  |  | $ | 55,715 |
Deferred taxes are recorded to give recognition to temporary differences between the tax bases of assets or liabilities and their reported amounts in the financial statements. Valuation allowances are established to reduce the carrying amounts of deferred tax assets when it is deemed more likely than not that the benefit of deferred tax assets will not be realized. Deferred tax assets and liabilities as of May 2, 2020 and April 27, 2019 consisted of the following:
|  | (In thousands) |
|  | 2020 |  |  | 2019 |
Deferred tax assets: |  |  |  |  |  |  |  |
Accrued expenses and other |  | $ | 4,930 |  |  | $ | 3,705 |
Inventory and amortizable assets |  |  | 565 |  |  |  | 265 |
Total deferred tax assets |  |  | 5,495 |  |  |  | 3,970 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property |  |  | 18,872 |  |  |  | 18,505 |
Intangibles and other |  |  | 1,446 |  |  |  | 1,452 |
Total deferred tax liabilities |  |  | 20,318 |  |  |  | 19,957 |
Net deferred tax liabilities |  | $ | 14,823 |  |  | $ | 15,987 |
The reconciliation of the statutory federal income tax rate to our effective tax rate is as follows:
|  | Fiscal |  |  | Fiscal |  |  | Fiscal |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Statutory federal income tax rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 30.4 | %
State income taxes, net of federal benefit |  |  | 2.9 |  |  |  | 2.9 |  |  |  | 2.4 |
Domestic manufacturing deduction benefit |  |  | - |  |  |  | - |  |  |  | (2.4 | )
Re-measurement of deferred taxes |  |  | - |  |  |  | - |  |  |  | (2.9 | )
Other differences |  |  | (.6 | ) |  |  | (.5 | ) |  |  | (.4 | )
Effective income tax rate |  |  | 23.3 | % |  |  | 23.4 | % |  |  | 27.1 | %
As of May 2, 2020, the gross amount of unrecognized tax benefits was $2.0 million and $91,000 was recognized as tax expense in Fiscal 2020. If the Company is to prevail on all uncertain tax positions, the net effect would be to reduce our tax expense by approximately $1.6 million. A reconciliation of the changes in the gross amount of unrecognized tax benefits, which amounts are included in other liabilities in the accompanying consolidated balance sheets, is as follows:
|  | (In thousands) |
|  | Fiscal |  |  | Fiscal |  |  | Fiscal |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Beginning balance |  | $ | 1,868 |  |  | $ | 1,733 |  |  | $ | 1,743 |
Increases due to current period tax positions |  |  | 120 |  |  |  | 139 |  |  |  | 204 |
Decreases due to lapse of statute of limitations and audit resolutions |  |  | (14 | ) |  |  | (4 | ) |  |  | (214 | )
Ending balance |  | $ | 1,974 |  |  | $ | 1,868 |  |  | $ | 1,733 |
Accrued interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense. As of May 2, 2020, unrecognized tax benefits included accrued interest of $267,000, of which approximately $15,000 was recognized as tax expense in Fiscal 2020. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law. The Tax Act made changes to the U.S. tax code, including reducing the U.S. federal tax rate from 35% to 21% effective January 1, 2018. The phasing in of the lower corporate income tax rate results in a blended federal statutory rate of 30.4% for our Fiscal 2018, compared with the previous 35% rate. Included in the effective tax rate for Fiscal 2018 is a one-time adjustment reducing income tax expense to remeasure previous deferred tax liabilities of $4.3 million. Annual income tax returns are filed in the United States and in various state and local jurisdictions. A number of years may elapse before an uncertain tax position, for which the Company has unrecognized tax benefits, are resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, The Company believes that unrecognized tax benefits reflect the most probable outcome. The Company adjusts these unrecognized tax benefits, as well as the related interest, in light of changing facts and circumstances. The resolution of any particular uncertain tax position could require the use of cash and an adjustment to our provision for income taxes in the period of resolution. Federal income tax returns for fiscal years subsequent to 2016 are subject to examination. Generally, the income tax returns for the various state jurisdictions are subject to examination for fiscal years ending after fiscal 2013.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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