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Income Taxes | 12 Months Ended
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Dec. 27, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | (7) Income Taxes On March 27, 2020, the CARES Act was enacted into law. The CARES Act is a tax and spending package intended to provide economic relief to address the impact of the COVID-19 pandemic. The CARES Act includes several significant business tax provisions that, among other things, would eliminate the taxable income limit for certain NOLs and allow businesses to carry back NOLs arising in 2018, 2019, and 2020 to the five prior tax years, accelerate refunds of previously generated corporate AMT credits, loosen the business interest limitation under section 163(j), and fix the qualified improvement property regulations in the 2017 Tax Cuts and Jobs Act. As a result of the CARES Act, the Company was able to obtain a tax refund of $6.7 million from the carryback of NOLs and a refund of prior AMT credits. The Company received the entire amount of the refund during the fiscal year 2020. The Company recognized an income tax benefit of $6.7 million during fiscal year 2020 due to the impact of the CARES Act and the finalization of the Company’s 2019 federal tax return. Income (loss) before income taxes for the Company’s domestic and foreign operations was as follows (in thousands):
|  | Fiscal Year |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Domestic operations |  | $ | (72,708 | ) |  | $ | (9,790 | ) |  | $ | (11,381 | )
Foreign operations |  |  | — |  |  |  | 395 |  |  |  | 637 |
Total |  | $ | (72,208 | ) |  | $ | (9,395 | ) |  | $ | (10,744 | )
Income tax expense (benefit) consisted of the following (in thousands):
|  | Fiscal Year |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Federal: |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | (6,739 | ) |  | $ | 159 |  |  | $ | (339 | )
Deferred |  |  | 13 |  |  |  | 9,379 |  |  |  | (1,644 | )
|  |  | (6,726 | ) |  |  | 9,538 |  |  |  | (1,983 | )
State and Local: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 185 |  |  |  | 227 |  |  |  | 73 |
Deferred |  |  | 5 |  |  |  | 4,425 |  |  |  | (305 | )
|  |  | 190 |  |  |  | 4,652 |  |  |  | (232 | )
Foreign: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | — |  |  |  | — |  |  |  | 20 |
|  |  | — |  |  |  | — |  |  |  | 20 |
Income tax expense (benefit) |  | $ | (6,536 | ) |  | $ | 14,190 |  |  | $ | (2,195 | )
Income tax expense (benefit) differed from the amounts computed by applying the U.S. federal income tax rates to income (loss) before income taxes as a result of the following (in thousands):
|  | Fiscal Year |
|  | 2020 |  |  | 2019 |  |  | 2018 |
U.S. federal statutory tax |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
Computed “expected” tax benefit |  | $ | (15,164 | ) |  | $ | (1,973 | ) |  | $ | (2,256 | )
Increase (reduction) resulting from: |  |  |  |  |  |  |  |  |  |  |  |
Valuation allowance |  |  | 14,265 |  |  |  | 16,116 |  |  |  | - |
Rate change impact of net operating loss carryback |  |  | (2,592 | ) |  |  | - |  |  |  | - |
Minority interest |  |  | 74 |  |  |  | (107 | ) |  |  | (87 | )
Permanent differences |  |  | 99 |  |  |  | 425 |  |  |  | 220 |
State and local income taxes, net of federal income tax effect |  |  | (3,338 | ) |  |  | (361 | ) |  |  | (436 | )
FICA and other tax credits |  |  | (248 | ) |  |  | (504 | ) |  |  | (522 | )
Equity compensation |  |  | 477 |  |  |  | 577 |  |  |  | 1,089 |
Other |  |  | (109 | ) |  |  | (106 | ) |  |  | (252 | )
Tax rate change |  |  | — |  |  |  | 123 |  |  |  | 49 |
|  | $ | (6,536 | ) |  | $ | 14,190 |  |  | $ | (2,195 | )
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities reflected in the consolidated balance sheets are presented below (in thousands):
|  | December 27, |  |  | December 29, |
|  | 2020 |  |  | 2019 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 14,364 |  |  | $ | 3,721 |
Accrued liabilities |  |  | 2,152 |  |  |  | 848 |
Deferred revenue |  |  | 573 |  |  |  | 423 |
Stock-based compensation |  |  | 1,993 |  |  |  | 2,516 |
Property and equipment |  |  | 3,505 |  |  |  | 4,568 |
Operating lease liabilities |  |  | 59,230 |  |  |  | 62,313 |
Tax credits and other carryforwards |  |  | 2,319 |  |  |  | 1,538 |
Gross deferred tax assets |  |  | 84,136 |  |  |  | 75,927 |
Valuation allowance |  |  | (30,381 | ) |  |  | (16,116 | )
Net deferred tax assets |  |  | 53,755 |  |  |  | 59,811 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Prepaids |  |  | (285 | ) |  |  | (492 | )
Right-of-use asset for operating leases |  |  | (51,637 | ) |  |  | (57,717 | )
Intangible assets |  |  | (1,249 | ) |  |  | (1,162 | )
Smallwares |  |  | (482 | ) |  |  | (533 | )
Other |  |  | (348 | ) |  |  | (134 | )
Total deferred tax liabilities |  |  | (54,001 | ) |  |  | (60,038 | )
Net deferred tax liabilities |  | $ | (246 | ) |  | $ | (227 | )
The Company has recorded deferred tax assets related to federal and state income tax net operating loss (“NOL”) carryforwards of approximately $14.3 million and $3.7 million for the years ended December 27, 2020 and December 29, 2019, respectively. The federal NOL, and a portion of the state NOLs, can be carried forward indefinitely, although certain jurisdictions, including federal and numerous states, limit NOL carryforwards to a percentage of current year taxable income. The Company regularly assesses the need for a valuation allowance related to its deferred tax assets, which includes consideration of both positive and negative evidence related to the likelihood of realization of such deferred tax assets to determine, based on the weight of the available evidence, whether it is more-likely-than-not that some or all of its deferred tax assets will not be realized. In its assessment, the Company considers recent financial operating results, projected future taxable income, the reversal of existing taxable differences, and tax planning strategies. The Company recorded a full valuation allowance against its net deferred tax assets during the first quarter of 2019, resulting in a non-cash charge to income tax expense of $13.6 million. The Company continued to maintain a valuation allowance against all of its deferred tax assets as of December 27, 2020. The Company did not provide for an income tax benefit on its pre-tax loss for the years ended December 27, 2020 and December 29, 2019. The Company assesses the likelihood of the realization of its deferred tax assets each quarter and the valuation allowance is adjusted accordingly. As of December 27, 2020, the Company has a valuation allowance related to its deferred tax assets of $30.4 million. As of December 29, 2019, the Company has a valuation allowance related to its deferred tax assets of $16.1 million. In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 27, 2020 and December 29, 2019, the Company had no interest or penalties accrued. As of December 27, 2020 and December 29, 2019, the Company had no uncertain tax positions. The tax years prior to 2015 are generally closed for examination by the United States Internal Revenue Service. However, certain of these tax years are open for examination as a result of net operating losses generated in these years and utilized in subsequent years. The Company’s last IRS examination was for the 2014 tax year; no IRS audits are currently ongoing. State statutes are generally open for audit for the 2015 to 2019 tax years.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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