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Note 13 - Income Taxes | 12 Months Ended
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Sep. 26, 2021
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | 13 INCOME TAXES Income tax expense (benefit) consists of the following:
(Thousands of Dollars) |  | 2021 |  |  | 2020 |  |  | 2019 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | (2,431 | ) |  | 8,779 |  |  | 8,763 |
State |  | 3,642 |  |  | (10 | ) |  | 1,171 |
Deferred |  | 6,004 |  |  | (4,665 | ) |  | (2,003 | )
|  |  | 7,215 |  |  |  | 4,104 |  |  |  | 7,931 |
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) |  | 2021 |  |  | 2020 |  |  | 2019 |
Computed “expected” income tax expense |  | 21.0 |  |  | 21.0 |  |  | 21.0 |
State income tax benefit, net of federal tax benefit |  | 5.6 |  |  | 21.7 |  |  | 1.3 |
Net income of associated companies |  | (1.8 | ) |  | (18.3 | ) |  | (3.9 | )
Resolution of tax matters |  | 3.2 |  |  | (30.5 | ) |  | 1.7 |
Remeasurement due to rate changes |  | — |  |  | 24.0 |  |  | — |
Non-deductible expenses |  | 0.9 |  |  | 19.4 |  |  | 3.4 |
Valuation allowance |  | (6.0 | ) |  | 110.0 |  |  | 10.8 |
Warrant valuation |  | (0.4 | ) |  | (7.3 | ) |  | (0.6 | )
Other |  | — |  |  | 4.4 |  |  | (0.4 | )
|  |  | 22.5 |  |  |  | 144.4 |  |  |  | 33.3 |
Net deferred income tax liabilities consist of the following components:
|  | September 26 |  |  | September 27 |
(Thousands of Dollars) |  | 2021 |  |  | 2020 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Property and equipment |  |  | (13,284 | ) |  |  | (18,646 | )
Identified intangible assets |  |  | (14,032 | ) |  |  | (16,765 | )
ASC 842 - Leases DTL |  |  | (15,813 | ) |  |  | (18,669 | )
Pension and postretirement benefits |  |  | (6,346 | ) |  |  | — |
Investments |  |  | (14,275 | ) |  |  | (6,154 | )
|  |  | (63,750 | ) |  |  | (60,234 | )
Deferred income tax assets: |  |  |  |  |  |  |  |
Allowance for credit losses |  |  | 237 |  |  |  | 1,733 |
Pension and postretirement benefits |  |  | — |  |  |  | 7,075 |
Long-term debt |  |  | 716 |  |  |  | 350 |
Interest deduction limitation |  |  | — |  |  |  | 5,383 |
Operating loss carryforwards |  |  | 26,999 |  |  |  | 28,240 |
ASC 842 - Leases DTA |  |  | 15,840 |  |  |  | 18,675 |
Accrued compensation |  |  | 6,630 |  |  |  | 13,142 |
Accrued expenses |  |  | 443 |  |  |  | 1,673 |
Other |  |  | 812 |  |  |  | 430 |
|  |  | 51,677 |  |  |  | 76,701 |
Valuation allowance |  |  | (28,222 | ) |  |  | (31,675 | )
Net deferred income tax liabilities |  |  | (40,295 | ) |  |  | (15,208 | )
All deferred taxes are categorized as non-current. A reconciliation of 2021 and 2020 changes in gross unrecognized tax benefits is as follows:
(Thousands of Dollars) |  | 2021 |  |  | 2020 |
Balance, beginning of year |  |  | 27,008 |  |  |  | 18,252 |
Changes in tax positions for prior years |  |  | 1,008 |  |  |  | (331 | )
Increases (decrease) in tax positions for the current year |  |  | (8,940 | ) |  |  | 9,825 |
Lapse in statute of limitations |  |  | (797 | ) |  |  | (738 | )
Balance, end of year |  |  | 18,279 |  |  |  | 27,008 |
Approximately $10,984,000 and $10,319,000 of the gross unrecognized tax benefit balances for 2021 and 2020, 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 $1,033,000 at September 26, 2021. The company does not expect that unrecognized tax benefits will fluctuate significantly in the next twelve months. 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, $1,393,000 at September 26, 2021 and $1,000,000 at September 27, 2020. There were no amounts provided for penalties at September 26, 2021 or September 27, 2020. At September 26, 2021 and September 27, 2020, we had a deferred tax asset of $0 and $5,383,000, respectively, related to disallowed interest expense. No significant income tax audits are currently in progress. Certain of the Company's state income tax returns for the year ended September 28, 2015, are open for examination. The Federal and remaining state returns are open beginning with the September 26, 2016, year. At September 26, 2021, we have state tax benefits of approximately $45,160,000 in net operating loss ("NOL") carryforwards that expire between 2022 and 2040. These NOL carryforwards result in a deferred income tax asset of $35,676,000 at September 26, 2021, a portion of which is offset by a valuation allowance.

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