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Note I - Income Taxes | 12 Months Ended
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Mar. 29, 2020
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | NOTE I - INCOME TAXES The income tax provision consists of the following for the fiscal years ended March 29, 2020 and March 31, 2019:
|  | March 29 , 20 20 |  |  | March 31, 2019 |
Federal |  |  |  |  |  |  |  |
Current |  | $ | 2,904 |  |  | $ | 5,385 |
Deferred |  |  | 322 |  |  |  | 43 |
Total Federal income tax |  |  | 3,226 |  |  |  | 5,428 |
State and local |  |  |  |  |  |  |  |
Current |  |  | 1,323 |  |  |  | 2,447 |
Deferred |  |  | 30 |  |  |  | 42 |
Total State and local income tax |  |  | 1,353 |  |  |  | 2,489 |
Total provision for income taxes |  | $ | 4,579 |  |  | $ | 7,917 |
On March 27, 2020, President Trump signed the Coronavirus Aid, Relief and Economic Security (“the CARES Act”) into law which among other provisions increases the limitation on the allowed business interest expense deduction from 30 percent to 50 percent of adjusted taxable income for tax years beginning January 1, 2019 and 2020. Additionally, the CARES Act allows businesses to immediately expense the full cost of Qualified Improvement Property, retroactive to tax years beginning on or after January 1, 2018. The Company is evaluating the impact of the CARES Act. The income tax provisions for the years ended March 29, 2020 and March 31, 2019 reflect effective tax rates of 25.4% and 26.9%, respectively. During the fiscal year ended March 31, 2019, pursuant to Staff Accounting Bulletin No. 118 ("SAB No. 118" ), Nathan’s refined and completed the accounting for the Tax Cuts and Jobs Act as the Company obtained, prepared, and analyzed additional information and as additional legislative, regulatory, and accounting guidance and interpretations became available, resulting in an increase in the provision for income taxes of $99 or 0.3 percentage points. The total income tax provision for the fiscal years ended March 29, 2020 and March 31, 2019 differs from the amounts computed by applying the United States Federal income tax rate of 21% to income before income taxes as a result of the following:
|  | March 29 , 20 20 |  |  | March 31, 2019 |
Computed tax expense |  | $ | 3,783 |  |  | $ | 6,176 |
State and local income taxes, net of Federal income tax benefit |  |  | 1,028 |  |  |  | 1,875 |
Change in uncertain tax positions, net |  |  | 60 |  |  |  | 86 |
Nondeductible meals and entertainment and other |  |  | (95 | ) |  |  | (66 | )
Nondeductible compensation |  |  | 31 |  |  |  | 57 |
Tax reform act |  |  | - |  |  |  | 99 |
Tax benefit share based payments |  |  | (228 | ) |  |  | (310 | )
Total provision for income taxes |  | $ | 4,579 |  |  | $ | 7,917 |
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:
|  | March 2 9 , |  |  | March 31, |
|  | 20 20 |  |  | 2019 |
Deferred tax assets |  |  |  |  |  |  |  |
Accrued expenses |  | $ | 394 |  |  | $ | 387 |
Allowance for doubtful accounts |  |  | 57 |  |  |  | 58 |
Deferred revenue |  |  | 485 |  |  |  | 955 |
Deferred stock compensation |  |  | 45 |  |  |  | 70 |
Excess of straight line over actual rent |  |  | 205 |  |  |  | 162 |
Other |  |  | 94 |  |  |  | 85 |
Total deferred tax assets |  | $ | 1,280 |  |  | $ | 1,717 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Deductible prepaid expense |  |  | 246 |  |  |  | 210 |
Depreciation expense |  |  | 720 |  |  |  | 783 |
Amortization |  |  | 323 |  |  |  | 381 |
Total deferred tax liabilities |  |  | 1,289 |  |  |  | 1,374 |
Net deferred tax asset (liability) |  | $ | (9 | ) |  | $ | 343 |
A valuation allowance is provided when it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. We consider the level of historical taxable income, scheduled reversal of temporary differences, tax planning strategies and projected future taxable income in determining whether a valuation allowance is warranted. Based upon these considerations, management believes that it is more likely than not that the Company will realize the benefit of its deferred tax asset. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits, excluding interest and penalties, for the fiscal years ended March 29, 2020 and March 31, 2019.
|  | March 29 , 20 20 |  |  | March 31, 2019 |
Unrecognized tax benefits, beginning of year |  | $ | 253 |  |  | $ | 263 |
Decreases of tax positions taken in prior years |  |  | (10 | ) |  |  | (8 | )
Increases based on tax positions taken in current year |  |  | 52 |  |  |  | 46 |
Settlements of tax positions taken in prior years |  |  | 16 |  |  |  | (48 | )
Unrecognized tax benefits, end of year |  | $ | 311 |  |  | $ | 253 |
The amount of unrecognized tax benefits at March 29, 2020 and March 31, 2019 were $311 and $253, respectively, all of which would impact Nathan’s effective tax rate, if recognized. As of March 29, 2020 and March 31, 2019, the Company had $259 and $245, respectively, accrued for the payment of interest and penalties. For the fiscal years ended March 29, 2020 and March 31, 2019 Nathan’s recognized interest and penalties in the amounts of $32 and $31, respectively. During the fiscal year ending March 28, 2021, Nathan’s will seek to settle additional uncertain tax positions with the tax authorities. As a result, it is reasonably possible the amount of unrecognized tax benefits, excluding the related accrued interest and penalties, could be reduced by up to $16 , which would favorably impact Nathan’s effective tax rate, although no assurances can be given in this regard. In November 2019, the State of New Jersey notified Nathan’s that our tax returns for the fiscal years ended March 27, 2016, March 26, 2017 and March 25, 2018 will be audited. The audit is ongoing. In January 2018, Nathan’s received notification from the State of Virginia that it was seeking to review Nathan’s tax returns for the period April 2014 through March 2017. The review has been completed and the effects of the review, which were not significant, were factored into the Company’s effective tax rate for fiscal 2019. The earliest tax years’ that are subject to examination by taxing authorities by major jurisdictions are as follows:
Jurisdiction |  | Fiscal Year
Federal |  | 2017
New York State |  | 2017
New York City |  | 2017
New Jersey |  | 2016
California |  | 2016

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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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