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Income Taxes | 12 Months Ended
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Feb. 02, 2019
Income Taxes [Abstract] |
Income Taxes | 12. Income Taxes: Unrecognized tax benefits for uncertain tax positions, primarily recorded in Other noncurrent liabilities, are established in accordance with ASC 740 when, despite the fact that the tax return positions are supportable, the Company believes these positions may be challenged and the results are uncertain. The Company adjusts these liabilities in light of chang ing facts and circumstances. As of February 2, 2019, the Company had gross unrecognized tax benefits totaling approximately $8.5 million, of which approximately $10.6 million (inclusive of interest) woul d affect the effective tax rate if recognized. The Company had approximately $3.2 million, $2.8 million and $4.1 million of interest and penalties accrued related to uncertain tax positions as of February 2, 2019, February 3, 2018 and January 28, 2017, respectively. The Company recognizes interest and penalties related to the resolution of uncertain tax positions as a component of income tax expense. The Company recogn ized $1,023,000, $986,000 and $716,000 of interest and penalties in the Consolidated Statement s of Income and Comprehensive Income for the years ended February 2, 2019, February 3, 2018 and January 28, 2017, respectively. The Company is no longer subject to U.S. federal income tax examinations for y ears before 2015. In state and local tax jurisdictions, the Company has limited exposure before 2008. During the next 12 months, various state and local taxing authorities’ statutes of limitations will expire and certain state examinations may close, which could result in a potential reduction of unrecognized tax benefits for which a range cannot be determined. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):
|  | February 2, 2019 |  | February 3, 2018 |  | January 28, 2017
Fiscal Year Ended |  |  |
Balances, beginning |  | $ | 9,531 |  | $ | 10,668 |  | $ | 9,560
Additions for tax positions of the current year |  |  | 420 |  |  | 2,537 |  |  | 2,618
Reduction for tax positions of prior years for: |  |  |  |  |  |  |  |  |
Changes in judgment |  |  | - |  |  | (1,209) |  |  | -
Settlements during the period |  |  | (419) |  |  | (390) |  |  | (328)
Lapses of applicable statutes of limitations |  |  | (1,047) |  |  | (2,075) |  |  | (1,182)
Balances, ending |  | $ | 8,485 |  | $ | 9,531 |  | $ | 10,668
The provision for income taxes consists of the following (in thousands):
|  | February 2, 2019 |  | February 3, 2018 |  | January 28, 2017
Fiscal Year Ended |  |  |
Current income taxes: |  |  |  |  |  |  |  |  |
Federal |  | $ | 281 |  | $ | 1,726 |  | $ | (411)
State |  |  | (359) |  |  | 1,401 |  |  | 873
Foreign |  |  | 1,371 |  |  | 1,952 |  |  | 2,053
Total |  |  | 1,293 |  |  | 5,079 |  |  | 2,515
Deferred income taxes: |  |  |  |  |  |  |  |  |
Federal |  |  | 2,064 |  |  | 3,816 |  |  | 45
State |  |  | (767) |  |  | (1,462) |  |  | (644)
Foreign |  |  | - |  |  | - |  |  | (14)
Total |  |  | 1,297 |  |  | 2,354 |  |  | (613)
Total income tax expense |  | $ | 2,590 |  | $ | 7,433 |  | $ | 1,902
Significant components of the Company’s deferred tax assets and liabilities as of February 2, 2019 and February 3, 2018 are as follows (in thousands):
|  |  |  |  |  |  | February 2, 2019 |  |  | February 3, 2018
| Deferred tax assets: |  |  |  |  |  |  |
|  | Allowance for doubtful accounts |  |  | $ | 180 |  | $ | 198
|  | Inventory valuation |  |  |  | 1,604 |  |  | 1,758
|  | Non-deductible accrued liabilities |  |  |  | 1,589 |  |  | 3,248
|  | Other taxes |  |  |  | 1,133 |  |  | 1,152
|  | Federal benefit of uncertain tax positions |  |  |  | 1,111 |  |  | 1,268
|  | Equity compensation expense |  |  |  | 4,242 |  |  | 4,321
|  | Net Operating Losses |  |  |  | 1,484 |  |  | 851
|  | Charitable contribution carryover |  |  |  | 1,568 |  |  | 2,041
|  | State Tax Credits |  |  |  | 1,150 |  |  | 789
|  | Other |  |  |  | 1,242 |  |  | 1,188
|  |  | Total deferred tax assets |  |  |  | 15,303 |  |  | 16,814
| Deferred tax liabilities |  |  |  |  |  |  |
|  | Property and equipment |  |  |  | 1,529 |  |  | 1,859
|  | Deferred lease liability |  |  |  | 1,977 |  |  | 1,191
|  | Accrued self-insurance reserves |  |  |  | 481 |  |  | 1,043
|  | Other |  |  |  | 107 |  |  | 151
|  |  | Total deferred tax liabilities |  |  |  | 4,094 |  |  | 4,244
| Net deferred tax assets |  |  | $ | 11,209 |  | $ | 12,570
As of February 2, 2019, the Company’s position is that its overseas subsidiaries will not invest undistributed earnings indefinitely. Future unremitted earnings when distributed are expected to be either distributions of GILTI-previously taxed income or eligible for a 100% dividends received deduction. The withholding tax rate on any unremitted earnings is zero and state income taxes on such earnings are considered immaterial. Therefore, the Company has not provided deferred U.S. income taxes on approximately $7.1 million of earnings from non-U.S. subsidiaries. The reconciliation of the Company’s effective income tax rate with the statutory rate is as follows:
|  |  |  |  |  | February 2, 2019 |  |  | February 3, 2018 |  |  | January 28, 2017 |
| Fiscal Year Ended |  |  |  |  |  |  |
| Federal income tax rate |  |  | 21.0 | % |  | 33.7 | % |  | 35.0 | %
| State income taxes |  |  | 1.1 |  |  | (4.7) |  |  | (0.2) |
| Global Intangible Low-taxed Income |  |  | 6.2 |  |  | - |  |  | - |
| Foreign Tax Credit |  |  | (4.0) |  |  | - |  |  | - |
| Foreign rate differential |  |  | (2.6) |  |  | (28.8) |  |  | (9.3) |
| Offshore Claim |  |  | (5.7) |  |  | (15.6) |  |  | (4.1) |
| Deemed Repatriation |  |  | - |  |  | 38.6 |  |  | - |
| Work Opportunity Credit |  |  | (3.4) |  |  | (6.0) |  |  | (3.4) |
| Addback on Wage Related Credits |  |  | 0.7 |  |  | 2.0 |  |  | 1.2 |
| Tax exempt interest |  |  | (2.4) |  |  | (4.4) |  |  | (1.6) |
| Charitable contribution of inventory |  |  | - |  |  | (1.0) |  |  | (13.1) |
| Uncertain tax positions |  |  | (1.5) |  |  | (4.4) |  |  | 2.4 |
| Deferred rate change |  |  | (2.0) |  |  | 39.2 |  |  | - |
| Other |  |  | 0.4 |  |  | (2.1) |  |  | (3.0) |
| Effective income tax rate |  |  | 7.8 | % |  | 46.5 | % |  | 3.9 | %
The Tax Act enacted in fiscal 2017 significantly revised U.S. corporate income tax law by, among other things, reducing the corporate income tax rate to 21% and implementing a modified territorial tax system that includes a one-time transition tax on deemed repatriated earnings of for eign subsidiaries. In response to the Tax Act, the SEC issued SAB 118, which allows issuers to recognize provisional estimates of the impact of the Tax Act in their financial statements and adjust in the period in which the estimate becomes finalized, or i n circumstances where estimates cannot be made, to disc lose and recognize within a one-year measurement period. As of February 2, 2019, the accounting for the income tax effects of the Tax Act has been completed. Implementation of the Tax Act during 2017 resulted in an approximate $6.2 million charge for the revaluation of the Company’s net domestic deferred tax assets and a one-time provisional transition tax charge of approximately $6.1 million, of which $5.7 million was recorded i n non-current liabilit ies in fiscal 2017. As of February 2, 2019, the Company has finalized these amounts. The finalization of the revaluation of the Company’s net domestic deferred tax assets resulted in a $.5 million benefit included as a component of its current year provi sion for income taxes and the non-current liability associated with the one-time transition tax charge was extinguished in 2018.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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