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Note 9 - Income Taxes
 6 Months Ended
Aug. 31, 2025
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

9.

INCOME TAXES

 

For the 13 weeks and 26 weeks ended August 31, 2025, the Company recorded income tax provisions from operations of $831 and $1,525, respectively, which included discrete income tax provisions of $(10) and $(38), respectively. For the 13 weeks and 26 weeks ended September 1, 2024, the Company recorded income tax provisions from operations of $750 and $1,126, respectively, which included discrete income tax provisions of $22 and $41, respectively.

 

The Company’s effective tax rates for the 13 weeks and 26 weeks ended August 31, 2025 were 25.7% and 25.4%, respectively, compared to 26.6% and 26.9% in the comparable prior periods. The effective tax rates for the 13 weeks and 26 weeks ended August 31, 2025 were higher than the U.S. statutory rate of 21% primarily due to state and local taxes and a discrete income tax provision for the accrual of interest related to unrecognized tax benefits. The effective rates for the 13 weeks and 26 weeks ended September 1, 2024 were higher than the U.S. statutory rate of 21% primarily due to state and local taxes and a discrete income tax provision for the accrual of interest related to unrecognized tax benefits.

 

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, "Income Taxes", requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. The Company has completed its initial assessment of the OBBBA corporate tax provisions which were enacted on July 4, 2025. OBBBA contained a number of U.S. corporate tax provisions of which the Company elected to expense U.S. incurred research or experimental expenditures immediately and full bonus depreciation for certain assets placed into service after January 19, 2025. As a result of the Company's elections, it is expected that in 2025 U.S. cash taxes will decrease with no material impact to its effective tax rate.