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Taxes
 3 Months Ended
Apr. 01, 2023
Income Tax Disclosure [Abstract]  
Taxes
9.
Taxes

Income Taxes

The Company’s effective tax rate for the three months ended April 1, 2023 was (132.3%) compared to 17.9% for the three months ended April 2, 2022. The effective tax rate for interim periods is determined using an annual effective tax rate, adjusted for discrete items. The Company was required to increase the valuation allowance recorded against U.S. deferred tax assets as a result of the limitation on interest deductions in the U.S. The forecasted full-year tax expense, which included the increase in valuation allowance, in relation to the Company’s forecasted full-year pretax loss (albeit minimal), drove an unusually high negative annual effective tax rate. Applying this negative annual effective tax rate to the pretax loss for the three months ended April 1, 2023 resulted in an income tax expense of $67,580, which is mostly reflected in income taxes payable on the Company’s consolidated balance sheet and consolidated statement of cash flows. Given the seasonal nature of the Company's principal business, this income tax expense is expected to largely reverse in the second, third and fourth quarters of fiscal 2023, when the Company expects to earn pretax income.

For the three months ended April 1, 2023, the difference between the U.S. federal statutory tax rate and the Company’s consolidated effective tax rate was primarily due to the valuation allowance noted above. In addition, the effective tax rate was impacted by tax expense from income earned in foreign jurisdictions, partially offset by tax benefits related to state income tax and foreign-derived intangible income (“FDII”). For the three months ended April 2, 2022, the difference between the U.S. federal statutory tax rate and the Company’s consolidated effective tax rate was primarily due to a tax benefit related to FDII, partially offset by state income tax expense and tax expense from income earned in foreign jurisdictions.

Non-Income Tax Matters

The Internal Revenue Service (the “IRS”) notified the Company of certain penalties assessed related to the annual disclosure and reporting requirements of the Affordable Care Act. The Company is in the process of appealing this determination and does not believe it has any liability with respect to this matter. Until the appeals process is complete, the IRS will maintain a federal tax lien which is currently limited to certain IRS refunds due to the Company.