XML 28 R15.htm IDEA: XBRL DOCUMENT v3.19.2
Income Taxes
 9 Months Ended
Jul. 07, 2019
Income Tax Disclosure [Abstract]  
Income Taxes
INCOME TAXES
Our tax rates for the quarter and year-to-date ended July 7, 2019 were impacted by the Tax Cuts and Jobs Act (the “Tax Act”), which was enacted into law on December 22, 2017. As a fiscal year taxpayer, the corporate federal tax rate reduction from 35% to 21% was phased in, resulting in a statutory federal tax rate of 24.5% for our fiscal year ending September 30, 2018, and 21.0% for our fiscal year ending September 29, 2019 and subsequent fiscal years.
In 2019 and 2018, income tax provisions reflect quarter tax rates of (17.9)% and 26.5%, respectively, and year-to-date tax rates of 18.4% and 46.9%, respectively. The major components of the year-over-year change in tax rates were the one-time, non-cash impact of the enactment of the Tax Act in fiscal year 2018, a decrease in the statutory tax rate, the impact of the termination of interest rate swap agreements, the release of valuation reserves on state tax credits and losses, and the release of a federal tax liability due to expiration of the statute of limitations. The final annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual rate could differ from our current estimates.
The following is a summary of the components of each tax rate (dollars in thousands):
 
Quarter
 
Year-to-date
 
July 7,
2019
 
July 8,
2018
 
July 7,
2019
 
July 8,
2018
Income tax expense at statutory rate
$
2,948

 
25.8
 %
 
$
18,715

 
28.6
 %
 
$
22,040

 
25.8
 %
 
$
46,752

 
28.9
 %
One-time, non-cash impact of the Tax Act
—

 
—
 %
 
878

 
1.3
 %
 
—

 
—
 %
 
32,082

 
19.8
 %
Termination of interest rate swaps
(2,984
)
 
(26.1
)%
 
—

 
—
 %
 
(2,984
)
 
(3.5
)%
 
—

 
—
 %
Release of valuation reserve on state tax losses and credits
(873
)
 
(7.6
)%
 
(1,312
)
 
(2.0
)%
 
(1,023
)
 
(1.2
)%
 
(1,312
)
 
(0.8
)%
Release of federal tax liability
(817
)
 
(7.2
)%
 
—

 
—
 %
 
(817
)
 
(1.0
)%
 
—

 
—
 %
Stock compensation excess tax expense
(18
)
 
(0.2
)%
 
(1,268
)
 
(1.9
)%
 
(66
)
 
(0.1
)%
 
(2,084
)
 
(1.3
)%
Adjustment to state tax provision
—

 
—
 %
 
—

 
—
 %
 
(1,027
)
 
(1.2
)%
 
—

 
—
 %
Other
(304
)
 
(2.6
)%
 
321

 
0.5
 %
 
(424
)
 
(0.4
)%
 
460

 
0.3
 %
(1)
$
(2,048
)
 
(17.9
)%
 
$
17,334

 
26.5
 %
 
$
15,699

 
18.4
 %
 
$
75,898

 
46.9
 %
____________________________
(1)
Percentages may not add due to rounding.