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INCOME TAXES | 12 Months Ended
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Dec. 30, 2017
INCOME TAXES [Abstract] |
INCOME TAXES | 7. Income Taxes Deferred income taxes are provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and those for income tax reporting purposes. Deferred income tax (assets) liabilities relate to:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Property, plant and equipment |  | $ | 3,853,837 |  |  | $ | 6,515,129 |  |  | $ | 6,694,885 |
Intangible assets |  |  | 2,620,791 |  |  |  | — |  |  |  | — |
Other |  |  | 64,905 |  |  |  | 119,618 |  |  |  | 99,989 |
Foreign Withholding Tax |  |  | 861,964 |  |  |  | — |  |  |  | — |
Total deferred income tax liabilities |  |  | 7,401,497 |  |  |  | 6,634,747 |  |  |  | 6,794,874 |
Other postretirement benefits |  |  | (235,510 | ) |  |  | (371,460 | ) |  |  | (281,154 | )
Inventories |  |  | (792,724 | ) |  |  | (806,680 | ) |  |  | (807,061 | )
Allowance for doubtful accounts |  |  | (97,570 | ) |  |  | (124,329 | ) |  |  | (124,351 | )
Intangible assets |  |  | — |  |  |  | (224,609 | ) |  |  | (299,137 | )
Accrued compensation |  |  | (83,829 | ) |  |  | (233,806 | ) |  |  | (252,297 | )
Pensions |  |  | (6,029,034 | ) |  |  | (9,406,224 | ) |  |  | (8,616,582 | )
Foreign Tax Credit |  |  | (449,578 | ) |  |  | — |  |  |  | — |
Total deferred income tax assets |  |  | (7,688,245 | ) |  |  | (11,167,108 | ) |  |  | (10,380,582 | )
Net deferred income tax (assets) liabilities |  | $ | (286,748 | ) |  | $ | (4,532,361 | ) |  | $ | (3,585,708 | )
Income before income taxes consists of:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Domestic |  | $ | 7,513,348 |  |  | $ | 7,276,239 |  |  | $ | 4,308,809 |
Foreign |  |  | 3,941,594 |  |  |  | 3,947,176 |  |  |  | 3,712,166 |
|  | $ | 11,454,942 |  |  | $ | 11,223,415 |  |  | $ | 8,020,975 |
The provision for income taxes follows:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 3,713,975 |  |  | $ | 2,554,341 |  |  | $ | 1,337,417 |
Foreign |  |  | 1,084,353 |  |  |  | 1,091,952 |  |  |  | 1,054,694 |
State |  |  | 319,439 |  |  |  | 194,514 |  |  |  | 140,139 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (47,241 | ) |  |  | (339,412 | ) |  |  | (223,530 | )
Foreign |  |  | 1,301,972 |  |  |  | — |  |  |  | — |
State |  |  | 37,189 |  |  |  | (63,303 | ) |  |  | (14,788 | )
|  | $ | 6,409,687 |  |  | $ | 3,438,092 |  |  | $ | 2,293,932 |
A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations follows:
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | Amount |  |  | Percent |  |  | Amount |  |  | Percent |  |  | Amount |  |  | Percent |
Income taxes using U.S. federal statutory rate |  | $ | 3,894,680 |  |  |  | 34 | % |  | $ | 3,815,962 |  |  |  | 34 | % |  | $ | 2,727,131 |  |  |  | 34 | %
State income taxes, net of federal benefit |  |  | 264,205 |  |  |  | 2 |  |  |  | 87,061 |  |  |  | 1 |  |  |  | 82,987 |  |  |  | 1 |
Impact on Foreign Repatriation Tax Reform |  |  | 2,034,065 |  |  |  | 18 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Impact of foreign subsidiaries on effective tax rate |  |  | (364,569 | ) |  |  | (3 | ) |  |  | (365,528 | ) |  |  | (3 | ) |  |  | (388,132 | ) |  |  | (5 | )
Impact on New Tax Law |  |  | 531,307 |  |  |  | 5 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Impact of manufacturers deduction on effective tax rate |  |  | (123,554 | ) |  |  | (1 | ) |  |  | (140,690 | ) |  |  | (1 | ) |  |  | (91,018 | ) |  |  | (1 | )
Other—net |  |  | 173,553 |  |  |  | 1 |  |  |  | 41,287 |  |  |  | — |  |  |  | (37,036 | ) |  |  | — |
|  |  | 6,409,687 |  |  |  | 56 | % |  | $ | 3,438,092 |  |  |  | 31 | % |  | $ | 2,293,932 |  |  |  | 29 | %
Total income taxes paid were $4,104,701 in 2017, $3,493,558 in 2016 and $2,348,865 in 2015. On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the "Act"). The Act, which is also commonly referred to as "U.S. tax reform," significantly changes U.S. corporate income tax laws by, among other provisions, reducing the maximum U.S. corporate income tax rate from 35% to 21% starting in 2018, and creating a territorial tax system with a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. During the year ending December 30, 2017, the Company recognized deferred income tax expense of $531,307 as a result of the re-measurement of deferred tax assets and liabilities to the new lower statutory rate of 21%. Due to the passage of the Tax Cut and Jobs Act, United States income taxes have been provided on the undistributed earnings of foreign subsidiaries ($17,153,163, at December 30, 2017) as well as the associated withholding taxes from the foreign countries. The amount of taxes associated with the current tax law change on the foreign earnings is $2,034,065. Foreign divisions that were previously treated as corporations for U.S. income tax purposes will generally no longer be taxed on their foreign source income by the U.S. federal government. The resulting taxes from the Tax Cut and Jobs Act of $2,034,065; $861,964 are associated with the withholding taxes assessed by the foreign countries, net of the applicable U.S. tax credits; and $1,172,101 in taxes are associated with the deemed repatriation of earnings held in foreign corporations. The Company has made an election to pay the $1,172,101 taxes in installments over 8 years with the payments due in the years 2018 to 2022 in the amount of $93,768; in the year 2023 a payment of $175,815; in the year 2024 a payment of $234,420; and the final payment in the year 2025 of $293,026. The final impact on the company from the Tax Act's transition tax legislation may differ from the aforementioned reasonable estimate due to the complexity of calculating and supporting with primary evidence such U.S. tax attributes as accumulated foreign earnings and profits, foreign tax paid, and other tax components involved in foreign tax credit calculations for prior years back to 1986. Such differences could be material, due to, among other things, changes in interpretations of the Tax Act, future legislative action to address questions that arise because of the Tax Act, changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates or changes to estimates the company has utilized to calculate the transition tax's reasonable estimate. Pursuant to the SAB118, the company is allowed a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. A reconciliation of the beginning and ending amount of unrecognized tax benefits are as follows:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Balance at beginning of year |  | $ | 251,839 |  |  | $ | 249,782 |  |  | $ | 248,645 |
Increases for positions taken during the current period |  |  | 53,013 |  |  |  | 44,172 |  |  |  | 27,947 |
Decreases resulting from the expiration of the statute of limitations |  |  | (5,118 | ) |  |  | (42,115 | ) |  |  | (26,810 | )
Balance at end of year |  | $ | 299,734 |  |  | $ | 251,839 |  |  | $ | 249,782 |
The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2013 and non-U.S. income tax examinations by tax authorities prior to 2011. Included in the balance at December 30, 2017, are $236,789 of unrecognized tax benefits that would affect the annual effective tax rate. In 2017, the Company recognized accrued interest related to unrecognized tax benefits in income tax expense. The Company had approximately $59,316 of accrued interest at December 30, 2017. The total amount of unrecognized tax benefits could increase or decrease within the next twelve months for a number of reasons, including the closure of federal, state and foreign tax years by expiration of the statute of limitations and the recognition and measurement considerations under ASC 740. The Company believes that the total amount of unrecognized tax benefits will not increase or decrease significantly over the next twelve months.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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