INCOME TAXES

3 Months Ended

Jan. 01, 2021

For the three months ended January 1, 2021 and December 27, 2019, the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows:


	Three Months Ended
(thousands, except tax rate data)	January 1, 2021			December 27, 2019
Profit before income taxes	$	26,011		$	8,589
Income tax expense	6,164			2,159
Effective income tax rate	23.7		%	25.1		%

The decrease in the effective tax rate for the three months ended January 1, 2021 compared to the prior year period is primarily due to a current period income tax benefit of an intra-entity transfer of an asset other than inventory.

The impact of the Company’s operations in jurisdictions where a valuation allowance is assessed is removed from the overall effective tax rate methodology and recorded directly based on year to date results for the year for which no tax expense or benefit can be recognized. The significant tax jurisdictions that have a valuation allowance for the periods ended January 1, 2021 and December 27, 2019 were:


January 1, 2021			December 27, 2019
France			France
Indonesia			Indonesia
Switzerland			Switzerland

The Company regularly assesses the adequacy of its provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes. As a result, the Company may adjust the reserves for unrecognized tax benefits due to the impact of changes in its assumptions or as a result of new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities and lapses of statutes of limitation. The Company’s 2021 fiscal year tax expense is anticipated to be unchanged related to uncertain income tax positions.

In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized benefits as a component of income tax expense. The Company is projecting accrued interest of $300 related to uncertain income tax positions for the fiscal year ending October 1, 2021.

The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. As of the date of this report, the following tax years remain open to examination by the respective significant tax jurisdictions:


Jurisdiction			Fiscal Years
United States			2017-2020
Canada			2016-2020
France			2017-2020
Germany			2017-2020
Italy			2018-2020
Switzerland			2010-2020

- 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.

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