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Income Taxes | 12 Months Ended
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Sep. 24, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Income tax expense (benefit) consists of the following:
(Thousands of Dollars) | 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |
Federal | 4,528 |  |  | 4,932 |  |  | (2,431) |
State | (336) |  |  | 142 |  |  | 3,642 |
Deferred | (4,541) |  |  | (4,376) |  |  | 6,044 |
| (349) |  |  | 698 |  |  | 7,255 |
Income tax (benefit) expense related to 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 (Loss) Income Before Income Taxes) | 2023 |  | 2022 |  | 2021
Computed “expected” income tax expense | 21.0 |  |  | 21.0 |  |  | 21.0 |
State income tax benefit, net of federal tax benefit | (5.4) |  |  | (8.9) |  |  | 5.6 |
Net income of associated companies | 31.2 |  |  | (77.2) |  |  | (1.8) |
Resolution of tax matters | 69.7 |  |  | (32.2) |  |  | 3.2 |
Remeasurement due to state rate changes | (84.0) |  |  | (11.2) |  |  | 0.1 |
Non-deductible expenses | (28.5) |  |  | 124.0 |  |  | 0.9 |
Provision to return adjustment | (0.5) |  |  | 70.2 |  |  | — |
Valuation allowance | 16.0 |  |  | 11.9 |  |  | (6.0) |
Wage credit, net addback | — |  |  | (7.5) |  |  | — |
Warrant valuation | — |  |  | (1.9) |  |  | (0.4) |
Interest and penalties | (9.0) |  |  | — |  |  | — |
Other | 0.8 |  |  | — |  |  | — |
| 11.3 |  |  | 88.2 |  |  | 22.6 |
Net deferred income tax liabilities consist of the following components:
(Thousands of Dollars) | September 24 2023 |  | September 25 2022
Deferred income tax liabilities: |  |  |
Property and equipment | (8,461) |  |  | (11,712) |
Identified intangible assets | (18,705) |  |  | (21,649) |
ASC 842 - Leases DTL | (9,890) |  |  | (11,308) |
Other | (615) |  |  | — |
Investments | (31,296) |  |  | (26,489) |
| (68,967) |  |  | (71,158) |
Deferred income tax assets: |  |  |
Allowance for credit losses | 1,655 |  |  | 802 |
Pension and postretirement benefits | 1,102 |  |  | 3,445 |
Long-term debt | 159 |  |  | 161 |
Interest deduction limitation | 9,828 |  |  | 4,809 |
Operating loss carryforwards | 25,749 |  |  | 26,224 |
ASC 842 - Leases DTA | 11,037 |  |  | 13,112 |
Accrued compensation | 2,341 |  |  | 1,914 |
Accrued expenses | 1,510 |  |  | 1,663 |
Other | — |  |  | 2,964 |
| 53,381 |  |  | 55,094 |
Valuation allowance | (25,765) |  |  | (26,655) |
Net deferred income tax liabilities | (41,351) |  |  | (42,719) |
All deferred taxes are categorized as non-current. A reconciliation of 2023 and 2022 changes in gross unrecognized tax benefits is as follows:
(Thousands of Dollars) | 2023 |  | 2022
Balance, beginning of year | 18,242 |  |  | 18,279 |
Changes in tax positions for prior years | (687) |  |  | (307) |
Increases (decrease) in tax positions for the current year | (347) |  |  | 1,887 |
Lapse in statute of limitations | (2,294) |  |  | (1,617) |
Balance, end of year | 14,914 |  |  | 18,242 |
Approximately $10.7 million and $11.9 million of the gross unrecognized tax benefit balances for 2023 and 2022, respectively, relate to state net operating losses which are netted against deferred taxes on our Consolidated Balance Sheet. The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $2.5 million at September 24, 2023. 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, $1.2 million at September 24, 2023 and $1.5 million at September 25, 2022. There were no amounts provided for penalties at September 24, 2023 or September 25, 2022. At September 24, 2023 and September 25, 2022, we had a deferred tax asset of $9.8 million and $4.8 million, respectively, related to disallowed interest expense. The Company is current undergoing a New York Franchise Tax audit that includes fiscal year periods 2019 through 2021. Certain of the Company's state income tax returns for the year ended September 25, 2016 are open for examination. The Federal and remaining state returns are open beginning with the September 24, 2017 year. At September 24, 2023, we have state tax benefits of approximately $43.3 million in net operating loss ("NOL") carryforwards that expire between 2022 and 2040. These NOL carryforwards result in a deferred income tax asset of $34.2 million at September 24, 2023, a portion of which is offset by a valuation allowance.

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