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INCOME TAXES
 12 Months Ended
Sep. 28, 2024
Income Taxes [Abstract]  
INCOME TAXES

NOTE 10. INCOME TAXES

The components of our provision for income taxes for our fiscal years 2024 and 2023 are as follows:

 

   (in thousands) 
   2024   2023 
Current:          
Federal  $246   $298 
State   305    289 
    551    587 
Deferred:          
Federal   (282)   (84)
State   17    146 
    (265)   62 
   $286   $649 

A reconciliation of income tax computed at the statutory federal rate to income tax expense is as follows:

 

   (in thousands) 
   2024   2023 
Tax provision at the statutory rate  $1,173   $1,273 
Non-controlling interests   (408)   (297)
State income taxes, net of federal income tax   264    343 
FICA tip credit   (1,029)   (799)
True up adjustment   77    89 
Other permanent items, net   209    40 
   $286   $649 

We have deferred tax liabilities and assets which arise primarily due to depreciation recorded at different rates for tax and book purposes offset by cost basis differences in depreciable assets due to the deferral of the recognition of insurance recoveries on casualty losses for tax purposes, investments in and management fees paid by limited partnerships, accruals for potential uninsured claims, bonuses accrued for book purposes but not paid within two and a half months for tax purposes, the capitalization of certain inventory costs for tax purposes not recognized for financial reporting purposes, the recognition of revenue from gift cards and other promotional programs not redeemed within twelve months of issuance, allowances for uncollectable receivables, unfunded limited retirement commitments, book-tax differences related to operating leases, interest rate swap mark-to-market adjustments and FICA tax credit. The components of our deferred tax assets (liabilities) at September 28, 2024 and September 30, 2023 were as follows:

 

   (in thousands) 
Deferred tax assets:  2024   2023 
Reversal of aged payables  $18   $18 
Capitalized inventory costs   26    28 
Accrued bonuses   52    66 
Accruals for potential uninsured claims   27    13 
Gift cards   247    223 
Deferred revenue   205    179 
Tip credit   914    570 
Operating lease liabilities   3,319    3,525 
Limited partnership investments   446    475 
Interest rate swaps   14    (134)
Accrued limited retirement   76    73 
Subtotal  $5,344   $5,036 
Less: Valuation allowance   
—
    
—
 
Total net deferred tax assets   5,344    5,036 

   (in thousands) 
Deferred tax liabilities:  2024   2023 
Limited partnership management fees  $(680)  $(873)
Book/tax differences in property and equipment and intangible assets   (1,901)   (1,573)
Operating lease right of use assets   (3,152)   (3,391)
Total deferred tax liabilities   (5,733)   (5,837)
           
Net deferred tax liability  $(389)  $(801)

As of September 28, 2024, the Company has federal general business credit carryforward of $914,000. General business credit carryovers can be carried back 1 year and carried forward 20 years. The company's general business credit carryforward will begin to expire in fiscal year 2040. The Company and its subsidiaries file a U.S. Corporation federal income tax return and a Florida Corporation income tax return. These returns are subject to examination by taxing authorities for all fiscal years after 2020.