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Note 5 - Income Taxes | 12 Months Ended
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Jul. 27, 2013
Notes |
Note 5 - Income Taxes | NOTE 5 — INCOME TAXES The components of the provision for income taxes are:
| 2013 |  | 2012 |  | 2011
Federal: |  |  |  |  |
Current | $ 17,215 |  | $ 16,009 |  | $ 12,539
Deferred | (3,021) |  | 931 |  | (952)
State: |  |  |  |  |
Current | 5,139 |  | 5,165 |  | 4,265
Deferred | (478) |  | 158 |  | (591)
| $ 18,855 |  | $ 22,263 |  | $ 15,261
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
|  | July 27, 2013 |  | July 28, 2012
Deferred tax assets: |  |  |  |
Leasing activities |  | $ 5,747 |  | $ 4,893
Federal benefit of uncertain tax positions |  | 8,028 |  | 6,681
Compensation related costs |  | 6,256 |  | 4,344
Pension costs |  | 5,644 |  | 10,316
Other |  | 1,868 |  | 1,656
Total deferred tax assets |  | 27,543 |  | 27,890
Deferred tax liabilities: |  |  |  |
Tax over book depreciation |  | 17,352 |  | 17,826
Patronage dividend receivable |  | 4,903 |  | 4,392
Investment in partnerships |  | 1,411 |  | 950
Other |  | 491 |  | 163
Total deferred tax liabilities |  | 24,157 |  | 23,331
Net deferred tax asset |  | $ 3,386 |  | $ 4,559
Deferred income tax assets (liabilities) are included in the following captions on the consolidated balance sheets at July 27, 2013 and July 28, 2012:
|  | 2013 |  | 2012
Other current assets |  | $ 5,053 |  | $ 4,154
Other assets |  | 1,211 |  | 1,644
Accounts payable and accrued expenses |  | (838) |  | (714)
Other liabilities |  | (2,040) |  | (525)
A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. In management’s opinion, in view of the Company’s previous, current and projected taxable income and reversal of deferred tax liabilities, such tax assets will more likely than not be fully realized. Accordingly, no valuation allowance was deemed to be required at July 27, 2013 and July 28, 2012. The effective income tax rate differs from the statutory federal income tax rate as follows:
|  | 2013 |  | 2012 |  | 2011 |
Statutory federal income tax rate |  | 35.0 | % | 35.0 | % | 35.0 | %
State income taxes, net of federal tax benefit |  | 6.8 |  | 6.4 |  | 6.6 |
Other |  | 0.4 |  | 0.1 |  | 0.5 |
Effective income tax rate |  | 42.2 | % | 41.5 | % | 42.1 | %
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
|  | 2013 |  | 2012
Balance at beginning of year |  | $ 14,895 |  | $ 12,476
Additions based on tax positions related to the current year |  | 2,745 |  | 2,419
Balance at end of year |  | $ 17,640 |  | $ 14,895
Unrecognized tax benefits at July 27, 2013 and July 28, 2012 include tax positions of $11,466 and $9,682 (net of federal benefit), respectively, that would reduce the Company’s effective income tax rate, if recognized in future periods. The Company recognizes interest and penalties on income taxes in income tax expense. The Company recognized $1,211, $1,008 and $817, related to interest and penalties on income taxes in fiscal 2013, 2012 and 2011, respectively. The amount of accrued interest and penalties included in the consolidated balance sheet was $5,820 and $4,609 at July 27, 2013 and July 28, 2012, respectively. The state of New Jersey audited the Company’s tax returns for fiscal 2002 through 2005 and has assessed two separate tax deficiencies related to nexus and the deductibility of certain payments between subsidiaries. The Company contested both these assessments through the state’s conference and appeals process. During fiscal 2011, Village received two determinations that the Company’s protests were denied. The Company has filed two complaints in Tax Court against the New Jersey Division of Taxation contesting these decisions. In addition, during fiscal 2012 the state of New Jersey audited the Company’s tax returns for fiscal 2006 through 2009 and has assessed a tax deficiency related to the same issue as above. The Company is currently contesting this assessment through the state’s conference and appeals process. A trial limited to the nexus dispute was conducted in June 2013 and no decision has been rendered. The ultimate resolution of these matters could significantly increase or decrease the total amount of the Company’s unrecognized tax benefits and could materially impact our results of operations and cash flows. An examination of the Company’s fiscal 2009 federal tax return was completed in fiscal 2011 with no change.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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