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Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

Note 9    Income Taxes

​

​	​	​	​	​	​	​	​	​	​
(amounts in thousands)		2022			2021			2020
Current:	​	​	​	​	​	​	​	​	​
Federal	​	$	28,536	​	$	20,771	​	$	29,121
State	​	​	7,896	​	​	6,374	​	​	9,984
Deferred:	​	​	​	​	​	​	​	​	​
Federal	​	​	3,191	​	​	8,074	​	​	4,090
State	​	​	(4,042)	​	​	4,239	​	​	1,567
Total	​	$	35,581	​	$	39,458	​	$	44,762

​

The reconciliation of income taxes has been computed at the federal statutory rate of 21% in 2022, 2021 and 2020. Ending deferred tax liability has been computed at the federal statutory rate of 21%.

​

​	​	​	​	​	​	​	​	​	​
(amounts in thousands)		2022			2021			2020
Income taxes at federal statutory rate	​	$	33,763	​	$	31,144	​	$	34,373
State income taxes, net of federal income tax benefit	​	​	4,700	​	​	6,207	​	​	7,261
Nondeductible employee-related expenses	​	​	2,235	​	​	2,530	​	​	2,223
State deferred rate change	​	​	(5,462)	​	​	—	​	​	-
Other	​	​	345	​	​	(423)	​	​	905
Provision for income taxes	​	$	35,581	​	$	39,458	​	$	44,762

​

The effective income tax rate was 22.1%, 26.6% and 27.3% in 2022, 2021, and 2020, respectively. The effective income tax rate differs from the federal statutory rate of 21% primarily due to state taxes as well as nondeductible employee-related expenses. The Company reduced its provision for income taxes by $5.5 million in 2022 primarily due to the effects of Pennsylvania House Bill 1342 which was enacted on July 8, 2022. The bill made significant changes to the Commonwealth’s corporate income tax laws which included lowering the tax rate gradually from 9.99% in 2022 to 4.99% in 2031, updating market sourcing rules, and codifying the economic nexus standard.

Cash paid for federal income taxes was $29.4 million, $20.4 million $33.5 million and in 2022, 2021 and 2020 respectively. Cash paid for state income taxes was $8.0 million, $4.4 million and $8.8 million in 2022, 2021 and 2020 respectively.

Note 9    Income Taxes (continued)

The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at December 31, 2022 and December 25, 2021, are:

​

​	​	​	​	​	​	​
(amounts in thousands)		2022			2021
Deferred tax assets:	​	​	​	​	​	​
Accounts receivable	​	$	1,195	​	$	951
Employment incentives	​	​	6,329	​	​	6,886
Self-insurance liability	​	​	8,717	​	​	9,324
Postretirement benefit obligations	​	​	5,963	​	​	7,412
Net operating loss and credit carryforwards	​	​	5,009	​	​	6,202
Unrecognized tax benefits	​	​	2,869	​	​	2,108
Other	​	​	1,101	​	​	1,830
Total deferred tax assets	​	​	31,183	​	​	34,713
Deferred tax liabilities:	​	​	​	​	​	​
Inventories	​	​	(13,398)	​	​	(16,038)
Unrealized gains on marketable securities	​	​	1,280	​	​	(2,177)
Prepaids	​	​	(5,570)	​	​	(6,365)
Depreciation	​	​	(124,720)	​	​	(125,220)
Total deferred tax liabilities	​	​	(142,408)	​	​	(149,800)
Net deferred tax liability	​	$	(111,225)	​	$	(115,087)

​

The following table summarizes the activity related to the Company’s unrecognized tax benefits:

​

​	​	​	​	​	​	​
(amounts in thousands)		2022			2021
Unrecognized tax benefits at beginning of year	​	$	10,036	​	$	8,337
Increases based on tax positions related to the current year	​	​	2,376	​	​	1,699
Additions for tax positions of prior year	​	​	1,249	​	​	—
Reductions for tax positions of prior years	​	​	—	​	​	—
Settlements	​	​	—	​	​	—
Expiration of the statute of limitations for assessment of taxes	​	​	—	​	​	—
Unrecognized tax benefits at end of year	​	$	13,661	​	$	10,036

​

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $3.6 million in 2022, $1.7 million in 2021 and $1.7 million in 2020.

The Company or one of its subsidiaries files tax returns in the United States and various state jurisdictions. The tax years subject to examination in the United States and in Pennsylvania, where the majority of the Company’s revenues are generated, are 2016 to 2022.

The Company has net operating loss carryforwards of $46 million available for state income tax purposes. The net operating losses will begin to expire starting in 2027. The Company expects to fully utilize these net operating loss carryforwards.

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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.

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