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Income Taxes | 12 Months Ended
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Sep. 29, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Income taxes consist of the following in each fiscal year (in thousands):
|  | 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |  |
Federal |  | $ | 32,251 |  |  | $ | 53,229 |  |  | $ | 28,934 |
State |  | 10,933 |  |  | 17,274 |  |  | 9,320 |
|  | 43,184 |  |  | 70,503 |  |  | 38,254 |
Deferred: |  |  |  |  |  |
Federal |  | (2,696) |  |  | (10,642) |  |  | 5,344 |
State |  | (8,116) |  |  | (1,347) |  |  | 2,513 |
|  | (10,812) |  |  | (11,989) |  |  | 7,857 |
Income tax expense from continuing operations |  | $ | 32,372 |  |  | $ | 58,514 |  |  | $ | 46,111 |
Our expense (benefit) for income taxes differs from the amount computed by applying the U.S. federal statutory rate to pre-tax income (loss). The sources and tax effects of the differences are as follows (in thousands):
|  | 2024 |  | 2023 |  | 2022
Pre-tax income (loss) |  | $ | (4,323) |  |  |  | $ | 189,340 |  |  |  | $ | 161,892 |  |
Income tax at federal statutory rate |  | (908) |  | 21.0 | % |  | 39,821 |  | 21.0 | % |  | 33,964 |  | 21.0 | %
State income taxes, net of federal benefit |  | (233) |  | 5.4 | % |  | 10,587 |  | 5.6 | % |  | 8,437 |  | 5.2 | %
Stock-based compensation expense |  | 51 |  | (1.2) | % |  | 71 |  | — | % |  | 122 |  | 0.1 | %
Tax credits, net of valuation allowance |  | (340) |  | 7.9 | % |  | (818) |  | (0.4) | % |  | (906) |  | (0.6) | %
Nondeductible goodwill related to impairment |  | 35,075 |  | (811.5) | % |  | — |  | — | % |  | — |  | — | %
Nondeductible goodwill related to the sale of company-operated restaurants |  | 1,787 |  | (41.3) | % |  | 9,280 |  | 4.9 | % |  | — |  | — | %
Nondeductible transaction costs |  | — |  | — | % |  | — |  | — | % |  | 940 |  | 0.6 | %
Expense (benefit) related to COLIs |  | (4,703) |  | 108.8 | % |  | (1,947) |  | (1.0) | % |  | 3,319 |  | 2.1 | %
Officers’ compensation limitation |  | 1,306 |  | (30.2) | % |  | 1,188 |  | 0.6 | % |  | 677 |  | 0.4 | %
Other, net |  | 337 |  | (7.8) | % |  | 332 |  | 0.2 | % |  | (442) |  | (0.3) | %
Effective tax rate |  | $ | 32,372 |  | (748.9) | % |  | 58,514 |  | 30.9 | % |  | 46,111 |  | 28.5 | %
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at each fiscal year-end are presented below (in thousands):
| 2024 |  | 2023
Deferred tax assets: |  |  |
Operating and finance lease liabilities | $ | 381,522 |  |  | $ | 372,095 |
Accrued defined benefit pension and postretirement benefits | 22,074 |  |  | 18,896 |
Deferred income | 15,465 |  |  | 15,137 |
Accrued legal settlements | 4,764 |  |  | 11,099 |
Accrued insurance | 7,135 |  |  | 8,086 |
Share-based compensation | 6,814 |  |  | 6,139 |
Accrued incentive compensation | 2,692 |  |  | 5,928 |
Capitalized research costs | 1,443 |  |  | 1,943 |
Tax loss and tax credit carryforwards | 387 |  |  | 1,956 |
Accrued compensation expense | 1,254 |  |  | 1,259 |
Other reserves and allowances | 1,241 |  |  | 1,144 |
Property and equipment, net of impairment | 5,847 |  |  | 181 |
Other, net | 4,201 |  |  | 3,852 |
Total gross deferred tax assets | 454,839 |  |  | 447,715 |
Valuation allowance | — |  |  | (1,043) |
Total net deferred tax assets | 454,839 |  |  | 446,672 |
Deferred tax liabilities: |  |  |
Operating and finance lease ROU assets | (378,531) |  |  | (380,040) |
Intangible assets | (88,378) |  |  | (84,969) |
Investment basis limitation | — |  |  | (6,191) |
Other | (1,542) |  |  | (1,701) |
Total gross deferred tax liabilities | (468,451) |  |  | (472,901) |
Net deferred tax liabilities | $ | (13,612) |  |  | $ | (26,229) |
Deferred tax assets as of September 29, 2024 include state gross net operating loss carryforwards of approximately $11.4 million, of which $9.1 million has an indefinite carryforward. The remainder will expire at various times between 2026 and 2042. At September 29, 2024, California Enterprise Zone Credit carryforwards expired, and the Company released $1.0 million of deferred tax assets and $1.0 million of valuation allowances thereto. We believe it is more likely than not that all other deferred tax assets will be realized through future taxable income or alternative tax strategies. The major jurisdictions in which the Company files income tax returns includes the United States and states in which we operate that impose an income tax. The federal statutes of limitations have not expired for fiscal year 2021 and forward. The statutes of limitations for California, which constitutes the Company's major state tax jurisdiction, have not expired for fiscal years 2018 and forward.

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