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Income Taxes | 12 Months Ended
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Jan. 01, 2022
Income Tax Disclosure [Abstract] |
Income Taxes |
Note 2 1. | Income Taxes
The company’s provision for income tax expense (benefit) consists of the following for Fiscal 2021, 2020, and 2019 (amounts in thousands):
|  | Fiscal 2021 |  |  | Fiscal 2020 |  |  | Fiscal 2019 |
Current Taxes: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 46,018 |  |  | $ | 64,113 |  |  | $ | 23,397 |
State |  |  | 11,790 |  |  |  | 15,434 |  |  |  | 5,539 |
|  |  | 57,808 |  |  |  | 79,547 |  |  |  | 28,936 |
Deferred Taxes: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 6,946 |  |  |  | (26,112 | ) |  |  | 17,335 |
State |  |  | (169 | ) |  |  | (5,042 | ) |  |  | 1,274 |
|  |  | 6,777 |  |  |  | (31,154 | ) |  |  | 18,609 |
Income tax expense |  | $ | 64,585 |  |  | $ | 48,393 |  |  | $ | 47,545 |
Fiscal 2020 deferred income taxes included the impact of the termination of Plan No.1. See Footnote 20, Postretirement Plans, for a description of the termination of Plan No. 1. Income tax expense (benefit) differs from the amount computed by applying the applicable U.S. federal income tax rate of 21% because of the effect of the following items for Fiscal 2021, 2020 and 2019 (amounts in thousands):
|  | Fiscal 2021 |  |  | Fiscal 2020 |  |  | Fiscal 2019 |
Tax at U.S. federal income tax rate |  | $ | 56,862 |  |  | $ | 42,149 |  |  | $ | 44,538 |
State income taxes, net of federal income tax benefit |  |  | 9,181 |  |  |  | 8,209 |  |  |  | 5,384 |
Net share-based payments (windfalls) |  |  | (104 | ) |  |  | (80 | ) |  |  | (828 | )
Other |  |  | (1,354 | ) |  |  | (1,885 | ) |  |  | (1,549 | )
Income tax expense |  | $ | 64,585 |  |  | $ | 48,393 |  |  | $ | 47,545 |
In Fiscal 2021, 2020 and 2019, the most significant difference in the effective rate and the statutory rate was state income taxes. Deferred tax assets (liabilities) are comprised of the following (amounts in thousands):
|  | January 1, 2022 |  |  | January 2, 2021 |
Self-insurance |  | $ | 5,502 |  |  | $ | 4,806 |
Compensation and employee benefits |  |  | 8,816 |  |  |  | 7,698 |
Deferred income |  |  | 4,948 |  |  |  | 5,988 |
Loss and credit carryforwards |  |  | 12,990 |  |  |  | 13,026 |
Equity-based compensation |  |  | 6,797 |  |  |  | 3,977 |
Legal accrual |  |  | 6,514 |  |  |  | 2,867 |
Deferred payroll tax under CARES act |  |  | 4,100 |  |  |  | 7,525 |
Pension and postretirement benefits |  |  | 1,722 |  |  |  | 2,390 |
Financing and operating lease right-of-use liabilities |  |  | 77,422 |  |  |  | 88,816 |
Other |  |  | 6,642 |  |  |  | 7,028 |
Valuation allowance |  |  | (1,030 | ) |  |  | (1,030 | )
Deferred tax assets |  |  | 134,423 |  |  |  | 143,091 |
Depreciation |  |  | (71,041 | ) |  |  | (69,056 | )
Intangibles |  |  | (114,882 | ) |  |  | (109,824 | )
Financing and operating lease right-of-use assets |  |  | (75,233 | ) |  |  | (85,720 | )
Hedging |  |  | (2,015 | ) |  |  | (4,357 | )
Other |  |  | (5,009 | ) |  |  | (2,393 | )
Deferred tax liabilities |  |  | (268,180 | ) |  |  | (271,350 | )
Net deferred tax liability |  | $ | (133,757 | ) |  | $ | (128,259 | )
The company has a deferred tax asset of $2.8 million related to a federal net operating loss carryforward which we expect to fully utilize before expiration. Additionally, the company and various subsidiaries have a net deferred tax asset of $4.8 million related to state net operating loss carryforwards, and $5.4 million for credit carryforwards with expiration dates through Fiscal 2041. The utilization of a portion of these state carryforwards could be limited in the future; therefore, a valuation allowance has been recorded. Should the company determine at a later date that certain of these losses which have been reserved for may be utilized, a benefit may be recognized in the Consolidated Statements of Income. Likewise, should the company determine at a later date that certain of these net operating losses for which a deferred tax asset has been recorded may not be utilized, a charge to the Consolidated Statements of Income may be necessary. See Note 2, Summary of Significant Accounting Policies, for the deferred tax asset valuation allowance analysis. There are no unrecognized gross tax benefits as of January 1, 2022. These amounts would be presented exclusive of interest accrued and recorded in other long-term liabilities on the Consolidated Balance Sheets. The company accrues interest expense and penalties related to income tax liabilities as a component of income before taxes. No accrual of penalties is reflected on the company’s balance sheet as the company believes the accrual of penalties is not necessary based upon the merits of its income tax positions. The company had no accrued interest balance at January 1, 2022 and January 2, 2021. The company defines the federal jurisdiction as well as various state jurisdictions as “major” jurisdictions. The company is no longer subject to federal examinations for years prior to 2018, and with limited exceptions, for years prior to 2017 in state jurisdictions. The following is a reconciliation of the total amounts of unrecognized tax benefits for Fiscal 2021, 2020, and 2019 (amounts in thousands):
|  | Fiscal 2021 |  |  | Fiscal 2020 |  |  | Fiscal 2019 |
Unrecognized tax benefit at beginning of fiscal year |  | $ | — |  |  | $ | 306 |  |  | $ | 750 |
Lapses of statutes of limitations |  |  | — |  |  |  | (306 | ) |  |  | (444 | )
Unrecognized tax benefit at end of fiscal year |  | $ | — |  |  | $ | — |  |  | $ | 306 |
At this time, we do not anticipate significant changes to the amount of gross unrecognized tax benefits over the next twelve 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 http://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 http://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 http://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 http://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 http://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 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 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 http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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