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Note 9 - Income Taxes
 9 Months Ended
Jun. 28, 2020
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

9

INCOME TAXES

 

We recorded an income tax expense of $368,000 related to a loss before taxes of $359,000 for the 13 weeks ended June 28, 2020, and an income tax benefit of $92,000 related to a loss before taxes of $90,000 for the 39 weeks ended June 28, 2020. For the 13 weeks ended June 30, 2019, we recorded an income tax expense of $1,505,000 related to income before taxes of $7,677,000 and an income tax expense of $6,175,000 related to income of $20,739,000 for the 39 weeks ended June 30, 2019. The effective income tax rate for the 13 and 39 weeks ended June 28, 2020 was negative 102.5% and positive 102.2%, respectively. The effective income tax rate for the 13 and 39 weeks ended June 30, 2019 was 19.6% and 29.8%

 

The primary differences between these rates and the U.S. federal statutory rate of 21% are due to the effect of state taxes, non-deductible expenses, adjustments to reserves for uncertain tax positions, including any related interest, mark-to-market adjustments to value the Warrants and certain adjustments made to reflect the impact of the Transactions.

 

The Company anticipates that it will realize benefits under the CARES Act related to payroll taxes, including deferrals of certain employer payroll tax payments in 2020 to the end of 2021 and 2022.

 

We file a consolidated federal tax return, as well as combined and separate tax returns in approximately 27 state and local jurisdictions. We do not currently have any federal tax examinations in progress. California is the only state with an income tax examination currently in progress. Our income tax returns have generally been audited or closed to audit through 2012. See Note 13 for a discussion of our tax audits.

 

At September 29, 2019, we had approximately $63,338,000 of state net operating loss benefits. The Company consumed its federal net operating losses in the year ended September 30, 2018.