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Income Tax
 12 Months Ended
Dec. 30, 2023
Income Tax Disclosure [Abstract]  
Income Tax

Note 13 – Income Tax

The income tax provision for continuing operations is made up of the following components:

 

 

 

 

 

 

 

 

 

(In thousands)

2023

 

 

2022

 

 

2021

 

Current income tax expense:

 

 

 

 

 

 

 

 

 

 

 

Federal

$

 

6,698

 

 

$

 

8,585

 

 

$

 

5,436

 

State

 

 

2,961

 

 

 

 

2,397

 

 

 

 

1,867

 

Total current income tax expense

 

 

9,659

 

 

 

 

10,982

 

 

 

 

7,303

 

Deferred income tax expense:

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

6,546

 

 

 

 

46

 

 

 

 

14,877

 

State

 

 

1,683

 

 

 

 

1,369

 

 

 

 

2,726

 

Total deferred income tax expense

 

 

8,229

 

 

 

 

1,415

 

 

 

 

17,603

 

Total income tax expense

$

 

17,888

 

 

$

 

12,397

 

 

$

 

24,906

 

 

A reconciliation of the statutory federal rate to the effective rate is as follows:

 

 

 

 

 

 

 

2023

 

2022

 

2021

Federal statutory income tax rate

 

21.0

 

%

 

 

21.0

 

%

 

 

21.0

 

%

Stock compensation

 

(0.9

)

 

 

 

(2.8

)

 

 

 

0.0

 

 

Non-deductible expenses

 

3.4

 

 

 

 

5.5

 

 

 

 

1.7

 

 

Change in tax contingencies

 

(1.3

)

 

 

 

(0.1

)

 

 

 

0.0

 

 

Charitable product donations

 

(0.2

)

 

 

 

(0.3

)

 

 

 

(0.1

)

 

Other, net

 

(0.3

)

 

 

 

0.1

 

 

 

 

(0.3

)

 

State taxes, net of federal income tax benefit

 

5.3

 

 

 

 

6.7

 

 

 

 

3.8

 

 

Tax credits

 

(1.5

)

 

 

 

(3.7

)

 

 

 

(0.9

)

 

Effective income tax rate

 

25.5

 

%

 

 

26.4

 

%

 

 

25.2

 

%

Deferred tax assets and liabilities resulting from temporary differences as of December 30, 2023 and December 31, 2022 are as follows:

 

December 30,

 

 

December 31,

 

(In thousands)

2023

 

 

2022

 

Deferred tax assets:

 

 

 

 

 

 

 

Employee benefits

$

 

21,074

 

 

$

 

27,387

 

Accrued workers' compensation

 

 

2,082

 

 

 

 

2,126

 

Allowance for credit losses

 

 

1,500

 

 

 

 

1,823

 

Restructuring

 

 

601

 

 

 

 

655

 

Deferred revenue

 

 

987

 

 

 

 

1,266

 

Stock warrant

 

 

31

 

 

 

 

626

 

Lease liabilities

 

 

82,970

 

 

 

 

82,284

 

Accrued insurance

 

 

1,045

 

 

 

 

985

 

State net operating loss carryforwards (a)

 

 

5,507

 

 

 

 

5,608

 

All other

 

 

8,538

 

 

 

 

4,433

 

Total deferred tax assets

 

 

124,335

 

 

 

 

127,193

 

Valuation allowances

 

 

(399

)

 

 

 

(357

)

Net deferred tax assets

 

 

123,936

 

 

 

 

126,836

 

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

Property and equipment

 

 

49,038

 

 

 

 

48,251

 

Lease assets

 

 

74,472

 

 

 

 

73,986

 

Inventory

 

 

31,618

 

 

 

 

33,290

 

Goodwill

 

 

36,936

 

 

 

 

33,606

 

Intangible assets

 

 

2,200

 

 

 

 

1,195

 

All other

 

 

3,576

 

 

 

 

2,801

 

Total deferred tax liabilities

 

 

197,840

 

 

 

 

193,129

 

Net deferred tax liability

$

 

73,904

 

 

$

 

66,293

 
(a)
As of December 30, 2023, the Company’s state net operating loss carryforwards in various taxing jurisdictions expire in tax years 2024 through 2043 if not utilized.

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

(In thousands)

2023

 

 

2022

 

Balance at beginning of year

$

 

1,165

 

 

$

 

1,220

 

Lapsed statutes of limitations

 

 

(185

)

 

 

 

(55

)

Effectively settled

 

 

(836

)

 

 

 

—

 

Balance at end of year

$

 

144

 

 

$

 

1,165

 

 

Unrecognized tax benefits of $0.1 million are set to expire prior to December 28, 2024. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. The amount of unrecognized tax benefits, including interest and penalties, that would reduce the Company’s effective income tax rate if recognized in future periods was $0.1 million as of December 30, 2023.

SpartanNash or its subsidiaries file income tax returns with federal, state and local tax authorities within the United States. With few exceptions, SpartanNash is no longer subject to examinations by U.S. federal tax authorities for fiscal years before the year ended January 2, 2021, and state or local tax authorities for fiscal years before the year ended December 28, 2019.