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Income Taxes | 12 Months Ended
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Aug. 27, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | 4. Income Taxes The provision / (benefit) for income taxes consists of the following (in thousands):
Fiscal year |  | 2022 |  |  | 2021 |  |  | 2020 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 7,655 |  |  | $ | 35,267 |  |  | $ | 40,084 |
Foreign |  |  | 1,839 |  |  |  | 1,714 |  |  |  | 1,589 |
State |  |  | 3,701 |  |  |  | 9,873 |  |  |  | 12,865 |
Total current |  | $ | 13,195 |  |  | $ | 46,854 |  |  | $ | 54,538 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  | $ | 13,883 |  |  | $ | (1,421 | ) |  | $ | (8,522 | )
Foreign |  |  | 180 |  |  |  | 848 |  |  |  | (599 | )
State |  |  | 3,663 |  |  |  | (521 | ) |  |  | (3,299 | )
Total deferred |  | $ | 17,726 |  |  | $ | (1,094 | ) |  | $ | (12,420 | )
Total |  | $ | 30,921 |  |  | $ | 45,760 |  |  | $ | 42,118 |
The following table reconciles the provision for income taxes using the statutory federal income tax rate to the actual provision for income taxes:
Fiscal year |  | 2022 |  |  | 2021 |  |  | 2020 |
Income taxes at the statutory federal income tax rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State income taxes |  |  | 4.7 |  |  |  | 4.2 |  |  |  | 4.4 |
Adjustments to Tax Reserve |  |  | (2.1 | ) |  |  | (0.3 | ) |  |  | (0.9 | )
Other |  |  | (0.6 | ) |  |  | (1.7 | ) |  |  | (0.8 | )
Total |  |  | 23.0 | % |  |  | 23.2 | % |  |  | 23.7 | %
The components of deferred income taxes included on the consolidated balance sheets are as follows (in thousands):
|  | August 27, 2022 |  |  | August 28, 2021 |
Deferred Tax Assets |  |  |  |  |  |
Payroll and benefit related |  | $ | 14,923 |  |  | $ | 21,893 |
Insurance related |  |  | 15,035 |  |  |  | 14,042 |
Environmental |  |  | 8,212 |  |  |  | 8,408 |
Accrued expenses |  |  | 8,170 |  |  |  | 10,134 |
Operating lease liabilities |  |  | 11,471 |  |  |  | 9,214 |
Other |  |  | 9,841 |  |  |  | 8,127 |
Total deferred tax assets |  | $ | 67,652 |  |  | $ | 71,818 |
Deferred Tax Liabilities |  |  |  |  |  |
Payroll and benefit related |  | $ | 20,588 |  |  | $ | 19,474 |
Tax in excess of book depreciation |  |  | 40,016 |  |  |  | 40,725 |
Purchased intangible assets |  |  | 39,747 |  |  |  | 36,183 |
Rental merchandise in service |  |  | 55,287 |  |  |  | 45,432 |
Operating lease right-of-use assets |  |  | 11,111 |  |  |  | 8,984 |
Other |  |  | 232 |  |  |  | 157 |
Total deferred tax liabilities |  |  | 166,981 |  |  |  | 150,955 |
Net deferred tax liability |  | $ | 99,329 |  |  | $ | 79,137 |
The Company regularly reviews deferred tax assets for recoverability based upon projected future taxable income and the expected timing of the reversals of existing temporary differences. Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets will be realized. Effective tax rate The Company’s effective tax rate for the fiscal year ended August 27, 2022 was 23.0% as compared to 23.2% for the corresponding period in the prior year. The decrease in the effective tax rate was primarily due to the tax benefit related to the release of existing tax reserves in fiscal 2022 compared to fiscal 2021. Foreign tax effect As of August 27, 2022, unremitted foreign earnings, have been retained by the Company’s foreign subsidiaries for indefinite reinvestment. If the Company were to repatriate those earnings, in the form of dividends or otherwise, the Company could be subject to immaterial withholding taxes payable to the various foreign countries. Uncertain tax positions As of August 27, 2022 and August 28, 2021, there was $6.4 million and $9.3 million, respectively, of unrecognized tax benefits, of which $5.7 million and $8.7 million, respectively, would favorably impact the Company’s effective tax rate, if recognized. The Company recognized interest and penalties related to uncertain tax positions as a component of income tax expense which is consistent with the recognition of these items in prior reporting periods. As of August 27, 2022 and August 28, 2021, the Company had accrued a total of a nominal amount and $0.1 million, respectively, in interest and penalties, in its long-term accrued liabilities. For the years ended August 27, 2022, August 28, 2021 and August 29, 2020 the Company recognized a nominal expense in its Consolidated Statement of Income related to interest and penalties. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Balance at August 29, 2020 |  | $ | 6,330 |
Additions based on tax positions related to the current year |  |  | 637 |
Additions for tax positions of prior years |  |  | 3,552 |
Reduction for tax positions of prior years |  |  | (287 | )
Statute expirations |  |  | (911 | )
Balance at August 28, 2021 |  |  | 9,321 |
Additions based on tax positions related to the current year |  |  | 489 |
Additions for tax positions of prior years |  |  | 107 |
Reduction for tax positions of prior years |  |  | (3,013 | )
Statute expirations |  |  | (487 | )
Balance at August 27, 2022 |  | $ | 6,417 |
The Company has a significant portion of its operations in the United States and Canada. It is required to file federal income tax returns as well as state income tax returns in a majority of the U.S. states and also in a number of Canadian provinces. At times, the Company is subject to audits in these jurisdictions, which typically are complex and can require several years to resolve. The final resolution of any such tax audits could result in either a reduction in the Company’s accruals or an increase in its income tax provision, both of which could have a material impact on the consolidated results of operations in any given period. All U.S. and Canadian federal income tax statutes have lapsed for filings up to and including fiscal years 2017 and 2014, respectively. With a few exceptions, the Company is no longer subject to state and local income tax examinations for periods prior to fiscal 2018. The Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change significantly in the next 12 months.

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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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://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 https://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 https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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