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INCOME TAXES
 12 Months Ended
Jan. 29, 2023
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

NOTE 17 – INCOME TAXES

 

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

 

   

Fifty-Two Weeks Ended

  
   

January 29,

    

January 30,

    

January 31,

  
   

2023

    

2022

    

2021

  

Current expense

                        

      Federal

   $ 1,024     $ 650     $ 5,858  

      Foreign

     75       107       108  

      State

     223       307       1,154  

         Total current expense

     1,322       1,064       7,120  
                         

Deferred taxes

                        

      Federal

     (2,617 )     1,980       (9,554 )

      State

     (542 )     344       (1,708 )

         Total deferred taxes

     (3,159 )     2,324       (11,262 )

            Income tax (benefit)/expense

   $ (1,837 )   $ 3,388     $ (4,142 )

 

Total tax benefit for fiscal 2023 was $1.5 million, of which $1.8 million benefit was allocated to continuing operations and $ 288,000 tax expense was allocated to other comprehensive income. Total tax expense for fiscal 2022 was $3.6 million, of which $3.4 million expense was allocated to continuing operations and $237,000 tax expense was allocated to other comprehensive income. Total tax benefit for fiscal 2021 was $4.2 million, of which $4.1 million benefit was allocated to continuing operations and $ 30,000 tax benefit 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-Two Weeks Ended

  
   

January 29,

    

January 30,

    

January 31,

  
   

2023

    

2022

    

2021

  
                         

Income taxes at statutory rate

     21.0 %     21.0 %     21.0 %

Increase (decrease) in tax rate resulting from:

                        

    State taxes, net of federal benefit

     4.1       3.4       3.0  

    Officer's life insurance

     4.0       -1.3       1.7  

    Expiration of capital loss

     0.0       2.0       0.0  

    Change in valuation allowance

     -0.2       -1.9       0.0  

    Consolidated Appropriation Act provisions

     0.0       0.0       1.8  

    Other

     1.0       -0.8       0.9  

         Effective income tax rate

     29.9 %     22.4 %     28.4 %

 

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

 

   

January 29,

    

January 30,

  
   

2023

    

2022

  

Assets

                

Intangible assets

   $ 6,409     $ 7,212  

Inventories

     3,618       -  

Deferred compensation

     3,007       2,807  

Allowance for bad debts

     889       2,079  

Employee benefits

     746       643  

Loss and credit carryover

     418       88  

Accrued liabilities

     79       320  

Deferred rent

     605       618  

Other

     215       194  

Total deferred tax assets

     15,986       13,961  

Valuation allowance

     (100 )     (88 )
      15,886       13,873  

Liabilities

                

Property, plant and equipment

     1,117       1,361  

Inventories

     -       900  

Other

     285       -  

Total deferred tax liabilities

     1,402       2,261  

Net deferred tax assets

   $ 14,484     $ 11,612  

 

At January 29, 2023 and January 30, 2022 our net deferred asset was $14.5 and $11.6 million, respectively. The increase in the valuation allowance of $12,000 was due to additional foreign tax credit carry forward. We expect to fully realize the benefit of the deferred tax assets, with the exception of the foreign tax credit carry forward, in future periods when the amounts become deductible. The foreign tax credit carry forward is $100,000 and expires beginning in fiscal 2029.

 

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 disclosure. We do not have unrecognized tax benefits as of January 29, 2023.

 

Tax years ending February 2, 2020 through January 29, 2023 remain subject to examination by federal and state taxing authorities.