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Income Tax
 12 Months Ended
Dec. 28, 2024
Income Tax Disclosure [Abstract]  
Income Tax

Note 14 – Income Tax

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

 

 

 

 

 

 

 

 

 

(In thousands)

2024

 

 

2023

 

 

2022

 

Current income tax expense:

 

 

 

 

 

 

 

 

 

 

 

Federal

$

 

4,027

 

 

$

 

6,698

 

 

$

 

8,585

 

State

 

 

1,728

 

 

 

 

2,961

 

 

 

 

2,397

 

Total current income tax expense

 

 

5,755

 

 

 

 

9,659

 

 

 

 

10,982

 

Deferred income tax expense:

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

4,414

 

 

 

 

6,546

 

 

 

 

46

 

State

 

 

557

 

 

 

 

1,683

 

 

 

 

1,369

 

Total deferred income tax expense

 

 

4,971

 

 

 

 

8,229

 

 

 

 

1,415

 

Total income tax expense

$

 

10,726

 

 

$

 

17,888

 

 

$

 

12,397

 

 

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

 

 

 

 

 

 

 

2024

 

2023

 

2022

Federal statutory income tax rate

 

21.0

 

%

 

 

21.0

 

%

 

 

21.0

 

%

Non-deductible goodwill impairment

 

49.4

 

 

 

 

—

 

 

 

 

—

 

 

State taxes, net of federal income tax benefit

 

17.1

 

 

 

 

5.3

 

 

 

 

6.7

 

 

Non-deductible expenses

 

21.4

 

 

 

 

3.4

 

 

 

 

5.5

 

 

Stock compensation

 

0.7

 

 

 

 

(0.9

)

 

 

 

(2.8

)

 

Change in tax contingencies

 

(0.6

)

 

 

 

(1.3

)

 

 

 

(0.1

)

 

Charitable product donations

 

(1.1

)

 

 

 

(0.2

)

 

 

 

(0.3

)

 

Contingent consideration

 

(4.1

)

 

 

 

—

 

 

 

 

—

 

 

Other, net

 

(2.0

)

 

 

 

(0.3

)

 

 

 

0.1

 

 

Tax credits

 

(4.5

)

 

 

 

(1.5

)

 

 

 

(3.7

)

 

Effective income tax rate

 

97.3

 

%

 

 

25.5

 

%

 

 

26.4

 

%

The increase in the effective tax rate in 2024 was driven primarily by the impact of the goodwill impairment within the Retail reporting unit. This included the impact of non-deductible goodwill impairment, as well as included the effect of lower pre-tax earnings which increased the rate of state taxes and other non-deductible expenses.

Deferred tax assets and liabilities resulting from temporary differences as of December 28, 2024 and December 30, 2023 are as follows:

 

December 28,

 

 

December 30,

 

(In thousands)

2024

 

 

2023

 

Deferred tax assets:

 

 

 

 

 

 

 

Employee benefits

$

 

20,991

 

 

$

 

21,074

 

Accrued workers' compensation

 

 

1,949

 

 

 

 

2,082

 

Allowance for credit losses

 

 

856

 

 

 

 

1,500

 

Restructuring

 

 

192

 

 

 

 

601

 

Deferred revenue

 

 

1,236

 

 

 

 

987

 

Lease liabilities

 

 

116,234

 

 

 

 

82,970

 

Accrued insurance

 

 

1,798

 

 

 

 

1,045

 

State net operating loss carryforwards (a)

 

 

5,533

 

 

 

 

5,507

 

All other

 

 

6,930

 

 

 

 

8,569

 

Total deferred tax assets

 

 

155,719

 

 

 

 

124,335

 

Valuation allowances

 

 

(419

)

 

 

 

(399

)

Net deferred tax assets

 

 

155,300

 

 

 

 

123,936

 

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

Property and equipment

 

 

57,977

 

 

 

 

49,038

 

Lease assets

 

 

107,277

 

 

 

 

74,472

 

Inventory

 

 

36,343

 

 

 

 

31,618

 

Goodwill

 

 

32,511

 

 

 

 

36,936

 

Intangible assets

 

 

8,571

 

 

 

 

2,200

 

All other

 

 

3,631

 

 

 

 

3,576

 

Total deferred tax liabilities

 

 

246,310

 

 

 

 

197,840

 

Net deferred tax liability

$

 

91,010

 

 

$

 

73,904

 
(a)
As of December 28, 2024, the Company’s state net operating loss carryforwards in various taxing jurisdictions expire in tax years 2025 through 2044 if not utilized.

 

The Company does not have material unrecognized tax positions in either 2024 or 2023. All remaining unrecognized tax benefits are set to expire prior to January 3, 2026. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense.

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 1, 2022, and state or local tax authorities for fiscal years before the year ended January 2, 2021.