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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | 11. Income Taxes Loss before income taxes includes the following components for the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021 (in thousands):
|  | 2023 |  | 2022 |  | 2021
U.S. |  | $ | (20,894) |  |  | $ | (77,976) |  |  | $ | (50,419) |
Foreign |  | (24) |  |  | (160) |  |  | (176) |
Loss before income taxes |  | $ | (20,918) |  |  | $ | (78,136) |  |  | $ | (50,595) |
The expense (benefit) for income taxes for the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021 consist of the following (in thousands):
|  | 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |  |
Federal |  | $ | 37 |  |  | $ | 374 |  |  | $ | — |
State |  | 273 |  |  | 373 |  |  | (152) |
Foreign |  | — |  |  | — |  |  | — |
Total current income tax expense (benefit) |  | $ | 310 |  |  | $ | 747 |  |  | $ | (152) |
Deferred: |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  | — |  |  | — |  |  | — |
Foreign |  | — |  |  | — |  |  | — |
Total deferred income tax expense (benefit) |  | — |  |  | — |  |  | — |
Income tax expense (benefit), net |  | $ | 310 |  |  | $ | 747 |  |  | $ | (152) |
The reconciliation between the income tax expense (benefit) and the amount of income tax computed by applying the U.S. federal statutory rate to loss before income taxes as shown in the accompanying Consolidated Statements of Operations and Comprehensive Loss for fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021 is as follows:
|  | 2023 |  | 2022 |  | 2021
Tax provision at U.S. federal statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes |  | 4.2 |  |  | 4.0 |  |  | 3.8 |
FICA tip tax credits |  | — |  |  | — |  |  | — |
Foreign taxes versus U.S statutory rate |  | — |  |  | — |  |  | — |
Valuation allowance on deferred income tax assets |  | (22.3) |  |  | (24.2) |  |  | (25.2) |
Impact of CARES Act and related method changes |  | — |  |  | — |  |  | — |
Other tax credits |  | — |  |  | — |  |  | — |
Meals and entertainment |  | — |  |  | — |  |  | — |
Excess stock options |  | (3.3) |  |  | (1.1) |  |  | 1.1 |
Employee travel |  | — |  |  | — |  |  | — |
Other |  | (1.1) |  |  | (0.7) |  |  | (0.4) |
Effective tax rate |  | (1.5) | % |  | (1.0) | % |  | 0.3 | %
The Company's federal and state deferred taxes at December 31, 2023 and December 25, 2022 are as follows (in thousands):
|  | 2023 |  | 2022
Deferred tax assets: |  |  |  |
Leasing transactions |  | $ | 113,963 |  |  | $ | 115,832 |
General business and other tax credits |  | 40,441 |  |  | 40,802 |
Net operating loss carryover |  | 44,131 |  |  | 47,847 |
Accrued compensation and related costs |  | 5,361 |  |  | 8,651 |
Goodwill |  | 7,244 |  |  | 7,851 |
Stock-based compensation |  | 6,333 |  |  | 7,309 |
Advanced payments |  | 628 |  |  | 1,371 |
Interest expense |  | 11,345 |  |  | 5,247 |
Other non-current deferred tax assets |  | 2,478 |  |  | 3,479 |
Subtotal |  | 231,924 |  |  | 238,389 |
Valuation allowance |  | (119,861) |  |  | (115,790) |
Total |  | $ | 112,063 |  |  | $ | 122,599 |
Deferred tax liabilities: |  |  |  |
Leasing transactions |  | $ | (97,386) |  |  | $ | (97,871) |
Property and equipment |  | (1,242) |  |  | (11,550) |
Supplies inventory |  | (4,415) |  |  | (4,047) |
Prepaid expenses |  | (1,472) |  |  | (1,906) |
Other non-current deferred tax liabilities |  | (7,548) |  |  | (7,225) |
Total |  | $ | (112,063) |  |  | $ | (122,599) |
Net deferred tax asset |  | $ | — |  |  | $ | — |
The Company had net operating loss carryforwards for tax purposes of $44.1 million as of December 31, 2023. This is comprised of approximately $17.0 million of federal net operating loss carryovers, approximately $17.9 million of state net operating loss carryovers, and approximately $9.2 million of foreign net operating loss carryovers. The federal net operating loss has an indefinite carryforward period, the state net operating loss carryovers expire at various dates between 2025 and 2042, and the foreign net operating loss carryovers expire at various dates between 2035 and 2042. As of December 31, 2023, the Company had a deferred tax asset of $39.3 million related to federal tax credits, which expire at various dates between 2037 and 2041. The Company also had a deferred tax asset of $1.1 million related to state tax credits which expire in 2024. The Company establishes a valuation allowance to reduce the carrying amount of deferred income tax assets when it is more likely than not that it will not realize some portion or all the tax benefit of its deferred income tax assets. The realization of deferred tax assets depends on the generation of future taxable income during the periods in which the temporary differences become deductible. In making this determination, the Company considers all available positive and negative evidence including historical operating losses, the reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies. In 2020, management determined that a full valuation allowance was required and has recorded a full valuation allowance as of December 31, 2023 and at December 25, 2022. Based on the Company's evaluation of its deferred tax assets, a valuation allowance of approximately $119.9 million has been recorded against the deferred tax asset for federal and state tax credits, federal and state deferred tax assets, all net operating loss carry forwards and the deferred taxes of our foreign subsidiary. The following table summarizes the Company's unrecognized tax benefits at December 31, 2023, December 25, 2022, and December 26, 2021 (in thousands):
|  | 2023 |  | 2022 |  | 2021
Beginning of year |  | $ | 185 |  |  | $ | 32 |  |  | $ | 80 |
Increase due to current year tax positions |  | — |  |  | 177 |  |  | 3 |
Due to decrease to a position taken in a prior year |  | — |  |  | — |  |  | — |
Settlements |  | — |  |  | — |  |  | — |
Reductions related to lapses in the statute of limitations |  | — |  |  | (24) |  |  | (51) |
End of year |  | $ | 185 |  |  | $ | 185 |  |  | $ | 32 |
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is approximately $0.2 million. The Company does not anticipate significant changes in the aggregate amount of unrecognized tax benefits within the next 12 months, other than nominal tax settlements. The Company had outstanding federal and state refund claims of approximately $0.6 million as of December 31, 2023.

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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/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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