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Note 8 - Income Taxes
 9 Months Ended
Jun. 28, 2025
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

(8) Income Taxes

 

Effective income tax rate. Our effective income tax rate was 23.4% for the nine-month period ended June 28, 2025, compared with 23.9% for the nine-month period ended June 29, 2024. The effective income tax rates for both periods were based upon the estimated rate applicable for the entire fiscal year adjusted to reflect any significant or discrete items related specifically to interim periods.

 

Deferred income taxes. As of June 28, 2025, and September 28, 2024, we recorded a deferred tax liability (net of valuation allowance) of $11.1 million and $11.6 million, respectively, in other liabilities on our consolidated balance sheets. We have $2.4 million of state net operating loss carryforwards (“NOLs”) that expire between 2031 and 2040.

 

The realization of our deferred tax assets is entirely dependent upon our ability to generate future taxable income in applicable jurisdictions. GAAP requires that we periodically assess the need to establish a reserve against our deferred tax assets to the extent we no longer believe it is more likely than not that they will be fully realized. As of June 28, 2025, and September 28, 2024, we recorded a valuation allowance of $112,000 and $149,000, respectively, pertaining to deferred tax assets that were not expected to be utilized. The valuation allowance is subject to periodic review and adjustment based on changes in facts and circumstances.

 

Uncertainty in income taxes. We establish contingency reserves for material, known tax exposures based on our assessment of the estimated liability that would be incurred in connection with the settlement of such matters. As of June 28, 2025, we had no material, known tax exposures that required the establishment of contingency reserves for uncertain tax positions.

 

We file U.S. federal, state and local income tax returns in various jurisdictions. Federal and various state tax returns filed subsequent to 2019 remain subject to examination.

 

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law, extending key provisions of the 2017 Tax Cuts and Jobs Act including, but not limited to, federal bonus depreciation and deductions for domestic research and development expenditures. The Company is currently evaluating OBBBA; however, it is not expected to have a material impact on the Company’s consolidated financial statements.