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Note 11 - Income Taxes | 12 Months Ended
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Sep. 29, 2019
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | 11 INCOME TAXES On December 22, 2017, the 2017 Tax Act was signed into law. Among other provisions, the 2017 Tax Act reduces the federal statutory corporate income tax rate from 35% to 21%. The reduction of the corporate tax rate caused us to re-measure our deferred tax assets and liabilities to the lower federal base rate of 21%. We reported a discrete adjustment from revaluing our deferred tax assets and liabilities which resulted in a provisional net decrease in income tax expense of $24,872,000 for the 13 weeks ended December 24, 2017. The Securities Exchange Commission issued rules that allow for a measurement period of up to one year after the enactment date of the 2017 Tax Act to finalize the recording of the related transitional impact. Apart from any future changes in interpretations, legislative action or changes in accounting standards, we have finalized and recorded the resulting adjustments as of September 29, 2019 . The impact of the re-measurement did not change materially for the 52 weeks ended September 29, 2019 . Income tax expense (benefit) consists of the following:
(Thousands of Dollars) |  | 2019 |  |  | 2018 |  |  | 2017 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 8,763 |  |  |  | 275 |  |  |  | 394 |
State |  |  | 1,171 |  |  |  | 875 |  |  |  | 819 |
Deferred |  |  | (2,003 | ) |  |  | (17,378 | ) |  |  | 10,398 |
|  |  | 7,931 |  |  |  | (16,228 | ) |  |  | 11,611 |
Income tax expense (benefit) related to continuing operations differs from the amounts computed by applying the U.S. federal income tax rate to income (loss) before income taxes. The reasons for these differences are as follows:
(Percent of Income (Loss) Before Income Taxes) |  | 2019 |  |  | 2018 |  |  | 2017 |
Computed “expected” income tax expense (benefit) |  |  | 21.0 |  |  |  | 24.7 |  |  |  | 35.0 |
State income tax expense (benefit), net of federal tax impact |  |  | 1.3 |  |  |  | 2.6 |  |  |  | 2.3 |
Net income of associated companies taxed at dividend rates |  |  | (3.9 | ) |  |  | (5.1 | ) |  |  | (3.7 | )
Resolution of tax matters |  |  | 1.7 |  |  |  | (8.4 | ) |  |  | 2.2 |
Non-deductible expenses |  |  | 3.4 |  |  |  | 2.9 |  |  |  | 1.5 |
Valuation allowance |  |  | 10.8 |  |  |  | 9.9 |  |  |  | 2.6 |
Warrant valuation |  |  | (0.6 | ) |  |  | 0.2 |  |  |  | (10.2 | )
Revaluation of deferred income taxes due to law charges |  |  | — |  |  |  | (79.1 | ) |  |  | — |
Other |  |  | (0.4 | ) |  |  | (0.4 | ) |  |  | (0.8 | )
|  |  | 33.3 |  |  |  | (52.7 | ) |  |  | 28.9 |
Net deferred income tax liabilities consist of the following components:
|  | September 29 |  |  | September 30 |
(Thousands of Dollars) |  | 2019 |  |  | 2018 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Property and equipment |  |  | (14,424 | ) |  |  | (16,506 | )
Identified intangible assets |  |  | (15,358 | ) |  |  | (18,486 | )
Long-term debt |  |  | (6,647 | ) |  |  | (11,074 | )
Accrued compensation |  |  | (189 | ) |  |  | 2,402 |
Investments |  |  | (3,164 | ) |  |  | (6,472 | )
|  |  | (39,782 | ) |  |  | (50,136 | )
Deferred income tax assets: |  |  |  |  |  |  |  |
Allowance for doubtful accounts and losses on loans |  |  | 1,279 |  |  |  | 910 |
Pension and postretirement benefits |  |  | 4,048 |  |  |  | 2,305 |
Operating loss carryforwards |  |  | 41,610 |  |  |  | 41,663 |
Accrued expenses |  |  | 426 |  |  |  | 424 |
Other |  |  | 2,526 |  |  |  | 3,075 |
|  |  | 49,889 |  |  |  | 48,377 |
Valuation allowance |  |  | (39,913 | ) |  |  | (37,349 | )
Net deferred income tax liabilities |  |  | (29,806 | ) |  |  | (39,108 | )
All deferred taxes are categorized as non-current. A reconciliation of 2019 and 2018 changes in gross unrecognized tax benefits is as follows:
(Thousands of Dollars) |  | 2019 |  |  | 2018 |
Balance, beginning of year |  |  | 16,104 |  |  |  | 13,915 |
Increases (decreases) in tax positions for prior years |  |  | 33 |  |  |  | 132 |
Increases in tax positions for the current year |  |  | 2,472 |  |  |  | 2,567 |
Lapse in statute of limitations |  |  | (357 | ) |  |  | (510 | )
Balance, end of year |  |  | 18,252 |  |  |  | 16,104 |
Approximately $10,665,000 and $10,312,000 of the gross unrecognized tax benefit balances for 2019 and 2018 , respectively, relate to state net operating losses which are netted against deferred taxes on our balance sheet. The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $14,019,000 at September 29, 2019 . We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. The amount of accrued interest related to unrecognized tax benefits was, net of tax, $848,000 at September 29, 2019 and $563,000 at September 30, 2018 . There were no amounts provided for penalties at September 29, 2019 or September 30, 2018 . At September 29, 2019, we had a deferred tax asset of $4,255,000 related to disallowed interest expense. No significant income tax audits are currently in progress and the Company has not received any notices of intent to audit. Certain of the Company's state income tax returns for the year ended September 29, 2013 are open for examination. The Federal and remaining state returns are open beginning with the September 29, 2014 year. At September 29, 2019 , we have state tax benefits of approximately $63,338,000 in net operating loss ("NOL") carryforwards that expire between 2020 and 2039. These NOL carryforwards result in a deferred income tax asset of $50,037,000 at September 29, 2019 , a portion of which is offset by a valuation allowance. As expected, we reported a taxable income in 2018 in excess of our remaining NOL, so that no Federal NOL is available in fiscal year 2019.

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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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