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NOTE 12 - INCOME TAXES
 12 Months Ended
Feb. 03, 2013
Income Tax Disclosure [Text Block]
NOTE 12 – INCOME TAXES

Our provision for income taxes was as follows for the periods indicated:

   
Fifty-Three Weeks Ended
   
Fifty-Two Weeks Ended
 
   
February 3,
   
January 29,
   
January 30,
 
   
2013
   
2012
   
2011
 
Current expense
                 
      Federal
  $ 3,894     $ 1,687     $ 2,450  
      Foreign
    50       54       50  
      State
    403       182       301  
         Total current expense
    4,347       1,923       2,801  
                         
Deferred taxes
                       
      Federal
    (35 )     (87 )     (1,735 )
      State
    55       52       (137 )
         Total deferred taxes
    20       (35 )     (1,872 )
            Income tax expense
  $ 4,367     $ 1,888     $ 929  

Total tax expense for the fiscal year ended February 3, 2013 was $4.4 million, of which $4.3 million was allocated to continuing operations and $51,000 was allocated to Other Comprehensive Income.  Total tax expense for fiscal 2012 was $1.6 million, of which $1.9 million was allocated to continuing operations and $303,000 benefit was allocated to Other Comprehensive Income.  Total tax expense for fiscal 2011 was $1.0 million, of which $929,000 was allocated to continuing operations and $100,000 was allocated to Other Comprehensive Income.

The effective income tax rate differed from the federal statutory tax rate as follows for the periods indicated:

   
Fifty-Three Weeks Ended
   
Fifty-Two Weeks Ended
 
   
February 3,
   
January 29,
   
January 30,
 
   
2013
   
2012
   
2011
 
                   
Income taxes at statutory rate
    34.0 %     34.0 %     35.0 %
Increase (decrease) in tax rate resulting from:
                       
      State taxes, net of federal benefit
    2.1       2.3       2.2  
      Change in deferred tax rates
    1.6                  
      Non-cash charitable contribution of appreciated inventory
    (0.3 )     (0.9 )     (3.2 )
      Officer's life insurance
    (3.1 )     (5.9 )     (6.8 )
      Captive insurance disbursement
    (0.9 )     (1.9 )     (2.4 )
      Subpart F Income
    0.0       0.2       2.2  
      Penalty
    0.1       0.0       (4.2 )
      Other
    0.1       (0.6 )     (0.5 )
         Effective income tax rate
    33.6 %     27.2 %     22.3 %

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities for the period indicated were:

   
February 3,
   
January 29,
 
   
2013
   
2012
 
Assets
           
Deferred compensation
  $ 3,319     $ 3,144  
Allowance for bad debts
    455       729  
State income taxes
    153       173  
Property, plant and equipment
    220       404  
Intangible assets
    989       1,270  
Charitable contribution carryforward
    745       954  
Inventories
    447       -  
Other
    245       197  
Total deferred tax assets     6,573       6,871  
Valuation allowance     (139 )     (139 )
      6,434       6,732  
Liabilities                
Inventories
    -       263  
Employee benefits
    328       343  
Total deferred tax liabilities     328       606  
Net deferred tax asset without AOCI     6,106       6,126  
                 
Deferred tax liability in AOCI     (115 )     (64 )
Total net deferred tax asset
  $ 5,991     $ 6,062  

At February 3, 2013 and January 29, 2012, our net deferred tax asset was $6.0 million and $6.1 million, respectively.
Except for certain state net operating losses being carried forward (against which a valuation allowance was established in fiscal 2010), we expect to fully utilize the remaining deferred tax assets in future periods when the amounts become deductible.

We acquired state income tax credits in our fiscal year ending January 2007.  When we determined that we would be unable to use a portion of the credits, we sold that portion and have been using the rest to offset state taxable income to the maximum allowable extent in each succeeding year (generally $100,000 or $50,000 per year as adjusted annually by the state).  We used the final amount of remaining credits to offset state taxable income in fiscal 2013; therefore, the deferred tax asset relating to these credits is no longer reflected on our balance sheet.

Current accounting standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  The guidance also addresses de-recognition, classification, interest and penalties, accounting in interim periods and disclosures.

We had no material unrecognized tax benefits at February 3, 2013 or January 29, 2012, and there were no material increases or decreases in unrecognized tax benefits during the 2013, 2012 or 2011 fiscal years.

We have elected to classify interest and penalties recognized with respect to unrecognized tax benefits as income tax expense.  During fiscal 2010 the Internal Revenue Service assessed a late payment penalty of $100,000, which we recognized as current tax expense.  During fiscal 2011 we successfully requested to have the penalty abated.  The abatement of the penalty is reflected as a $100,000 reduction in fiscal 2011 federal income tax expense.  No interest or penalties were accrued as of February 3, 2013 or January 29, 2012.

Tax years beginning January 31, 2010, through February 3, 2013 remain subject to examination by federal and state taxing authorities.