XML 23 R12.htm IDEA: XBRL DOCUMENT v3.21.2
Income Taxes
 3 Months Ended
Aug. 29, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The provision for income taxes for the three months ended August 29, 2021 and August 30, 2020, was a benefit of $2.1 million and $4.3 million, respectively. The effective tax rate for the three months ended August 29, 2021 and August 30, 2020 was 18% and 28%, respectively. The effective tax rate for the three months ended August 29, 2021, was lower than the statutory federal income tax rate of 21% primarily due to the movement of the valuation allowance recorded against certain deferred tax assets, partially offset by the impact of state taxes, and stock compensation including an adjustment for 162(m) related non-deductible officer’s compensation.
As of August 29, 2021 and May 30, 2021, the Company had unrecognized tax benefits of $1.1 million and $0.9 million, respectively. Included in the balance of unrecognized tax benefits as of August 29, 2021 and May 30, 2021, is $1.0 million and $0.8 million, respectively, of tax benefits that, if recognized, would result in an adjustment to the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly within the next twelve months.
The Company has elected to classify interest and penalties related to uncertain tax positions as a component of its provision for income taxes. The Company has accrued an insignificant amount of interest and penalties relating to the income tax on the unrecognized tax benefits as of August 29, 2021 and May 30, 2021.
Due to tax attribute carryforwards, the Company is subject to examination for tax years 2017 forward for U.S. tax purposes. The Company is also subject to examination in various state jurisdictions for tax years 2015 forward, none of which were significant.