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INCOME TAXES

12 Months Ended

Oct. 03, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

13. INCOME TAXES

The provision for income taxes attributable to continuing operations consists of the following:

		Year Ended
		October 3, 2015				September 27, 2014
		(In thousands)

Current provision:
Federal		$	1,684			$	2,029
State and local			699				154
			2,383				2,183

Deferred benefit:
Federal			342				(169	)
State and local			(129	)			(239	)
			213				(408	)

		$	2,596			$	1,775

The effective tax rate differs from the U.S. income tax rate as follows:

		Year Ended
		October 3, 2015				September 27, 2014
		(In thousands)

Provision at Federal statutory rate (34% in 2015 and 2014)		$	3,056			$	2,707

State and local income taxes, net of tax benefits			346				(26	)

Tax credits			(583	)			(655	)

Income attributable to non-controlling interest			(341	)			(432	)

Changes in tax rates			67				(97	)

Other			51				278

		$	2,596			$	1,775

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:

		October 3, 2015				September 27, 2014
		(In thousands)

Long-term deferred tax assets (liabilities):
State net operating loss carryforwards		$	3,069			$	3,855
Operating lease deferred credits			793				888
Depreciation and amortization			259				(10	)
Deferred compensation			794				1,322
Partnership investments			(220	)			(411	)
Other			(19	)			102

Total long-term deferred tax assets			4,676				5,746
Valuation allowance			(223	)			(532	)
Total net deferred tax assets		$	4,453			$	5,214

In assessing the realizability of deferred tax assets, Management considers whether it is more likely than not that the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. In the assessment of the valuation allowance, appropriate consideration was given to all positive and negative evidence including recent operating profitability, forecasts of future earnings and the duration of statutory carryforward periods. The Company recorded a valuation allowance of $223,000 and $532,000 as of October 3, 2015 and September 27, 2014, respectively, attributable to state and local net operating loss carryforwards which are not realizable on a more-likely-than-not basis. During fiscal 2015, the Company’s valuation allowance decreased by approximately $309,000 as the Company determined that certain state net operating losses became realizable on a more-likely-than-not basis.

As of October 3, 2015, the Company has New York State net operating losses of approximately $19,700,000 and New York City net operating loss carryforwards of approximately $17,700,000 that expire through fiscal 2036.

During fiscal 2015, certain equity compensation awards expired unexercised. As such, the Company reversed the related deferred tax asset in the amount of approximately $548,000 as a charge to Additional Paid-in Capital as there was a sufficient pool of windfall tax benefit available.

A reconciliation of the beginning and ending amount of unrecognized tax benefits excluding interest and penalties is as follows:

		October 3,				September 27,
		2015				2014
		(In thousands)

Balance at beginning of year		$	162			$	162

Additions based on tax positions taken in current and prior years			145				—

Balance at end of year		$	307			$	162

The entire amount of unrecognized tax benefits if recognized would reduce our annual effective tax rate. As of October 3, 2015, the Company accrued approximately $211,000 of interest and penalties. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. Inherent uncertainties exist in estimates of tax contingencies due to changes in tax law, both legislated and concluded through the various jurisdictions’ tax court systems.

The Company files tax returns in the U.S. and various state and local jurisdictions with varying statutes of limitations. The 2012 through 2015 fiscal years remain subject to examination by the Internal Revenue Service most state and local tax authorities.