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Income Taxes
9 Months Ended
Jun. 29, 2019
Income Taxes [Abstract]  
Income Taxes

D. INCOME TAXES



The Company’s effective tax rate differs from the federal statutory rate primarily as a result of state income taxes and tax credits.



In December 2017, the Tax Cuts and Jobs Act (the “Tax Act”) became law.  Among other things, the Tax Act reduced the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018, and allowed full expensing of qualified property when placed into service.



For the fiscal years ended September 28, 2019 and September 29, 2018 the Company has a blended federal corporate tax rate of 21.0% and 24.5%, respectively, based on the effective date of the tax rate reduction.  As a result of the decrease in the federal rate, the Company recorded in the first quarter ended December 30, 2017 (fiscal 2018) a decrease in its net deferred tax liabilities of $26.7 million, with a corresponding reduction to deferred income tax expense.



During the third quarter ended June 30, 2018 (fiscal 2018) the Company adopted a tax calculation method change that resulted in the accelerated deduction of certain property-related expenditures.  This change was included in the Company’s fiscal 2017 tax return that was finalized during third fiscal quarter (fiscal 2018).  As a result of this change and the change in the federal statutory tax rate from 35% to 21% in December 2017, the Company recorded in the fiscal third quarter ended June 30, 2018 (fiscal 2018) a decrease in its net deferred tax liabilities of $10.6 million, with a corresponding reduction to deferred income tax expense.



The Company has unrecognized tax benefits and could incur interest and penalties related to uncertain tax positions. These amounts are insignificant and are not expected to significantly increase or decrease within the next twelve months.