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Income Taxes:
 12 Months Ended
Dec. 28, 2024
Income Taxes:  
Income Taxes:

11.     Income Taxes:

A reconciliation of the expected federal income tax expense based on the federal statutory tax rate to the actual income tax expense is provided below:

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Year Ended

 

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December 28, 2024

    

December 30, 2023

    

December 31, 2022

 

Federal income tax expense at statutory rate (21%, 21%, 21%)

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$

10,757,000

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$

10,785,900

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$

10,664,500

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Change in valuation allowance

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180,000

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(551,600)

​

 

(6,600)

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State and local income taxes, net of federal benefit

​

 

1,435,800

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1,513,100

​

 

1,515,900

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Permanent differences, including stock option expenses

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(1,479,400)

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(1,372,300)

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(955,900)

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Expiration of attributes

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—

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528,600

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—

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Adjustment to uncertain tax positions

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​

258,500

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240,100

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​

185,300

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Other, net

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117,900

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39,400

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(44,600)

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Actual income tax expense

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$

11,269,800

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$

11,183,200

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$

11,358,600

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Components of the provision for income taxes are as follows:

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Year Ended

 

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December 28, 2024

    

December 30, 2023

    

December 31, 2022

 

Current:

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Federal

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$

8,840,600

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$

9,237,600

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$

8,892,200

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State

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2,025,500

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1,883,900

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2,167,900

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Foreign

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563,000

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573,800

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586,200

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Current provision

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11,429,100

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11,695,300

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11,646,300

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Deferred:

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Federal

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(108,900)

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(504,700)

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(351,500)

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State

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(50,400)

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(7,400)

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63,800

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Deferred provision

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(159,300)

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(512,100)

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(287,700)

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Total provision for income taxes

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$

11,269,800

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$

11,183,200

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$

11,358,600

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The tax effects of temporary differences that give rise to the net deferred income tax assets and liabilities are presented below:

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December 28, 2024

    

December 30, 2023

 

Deferred tax assets:

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Accounts receivable and lease reserves

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$

100

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$

500

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Non-qualified stock option expense

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1,942,000

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1,769,200

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Deferred revenue

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1,728,100

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1,612,200

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Trademarks

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40,200

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36,900

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Lease deposits

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—

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6,700

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Lease revenue and initial direct costs

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​

21,300

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​

29,200

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Foreign tax credits

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​

597,300

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​

631,100

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Valuation allowance

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(530,000)

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(350,000)

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Operating lease liabilities

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​

884,500

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​

1,026,600

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Other

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348,300

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291,100

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Total deferred tax assets

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5,031,800

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5,053,500

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Deferred tax liabilities:

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Depreciation and amortization

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(820,000)

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(1,001,100)

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Total deferred tax liabilities

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(820,000)

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(1,001,100)

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Total net deferred tax assets

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$

4,211,800

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$

4,052,400

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The Company has assessed its taxable earnings history and prospective future taxable income. Based upon this assessment, the Company has determined that it is more likely than not that its deferred tax assets will be realized in future periods and no valuation allowance is necessary, except for the deferred tax assets related to the foreign tax credits. The foreign tax credits will expire after 10 years. As a result, valuation allowances of $530,000 and $350,000 as of December 28, 2024 and December 30, 2023, respectively, have been recorded.

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The amount of unrecognized tax benefits, including interest and penalties, as of December 28, 2024 and December 30, 2023, was $1,663,400 and $1,345,000, respectively, primarily for potential state taxes. All of these unrecognized tax benefits, if recognized, would impact the effective tax rate.

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The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense for all periods presented. The Company had accrued approximately $369,100 and $261,900 for the payment of interest and penalties at December 28, 2024 and December 30, 2023, respectively.

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

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Total

 

Balance at December 31, 2022

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$

871,300

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Increases related to current year tax positions

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277,600

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Expiration of the statute of limitations for the assessment of taxes

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(65,800)

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Balance at December 30, 2023

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1,083,100

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Increases related to current year tax positions

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283,100

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Expiration of the statute of limitations for the assessment of taxes

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(71,900)

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Balance at December 28, 2024

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$

1,294,300

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The Company and its subsidiaries file income tax returns in the U.S. federal, numerous state and certain foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2020. The Company is currently under examination by the Internal Revenue Service for the 2022 tax year. We expect various statutes of limitation to expire during the next 12 months. Due to the uncertain response of taxing authorities, a range of outcomes cannot be reasonably estimated at this time.