Income Taxes |
3 Months Ended |
|---|---|
Jun. 28, 2025 | |
| Income Taxes | |
| Income Taxes | 9. Income Taxes The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes (“ASC 740”). In accordance with ASC 740, the Company recognizes deferred tax assets and liabilities based on the liability method, which requires an adjustment to the deferred tax asset or liability to reflect income tax rates currently in effect. When income tax rates increase or decrease, a corresponding adjustment to income tax expense is recorded by applying the rate change to the cumulative temporary differences. ASC 740 prescribes the recognition threshold and measurement principles for financial statement disclosure of tax positions taken or expected to be taken on a tax return. ASC 740 requires the Company to determine whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recognized. Additionally, ASC 740 provides guidance on recognition measurement, derecognition, classification, related interest and penalties, accounting in interim periods, disclosure, and transition. The income tax rate was 25.1% and 22.9% for the thirteen weeks ended June 28, 2025 and June 29, 2024, respectively. The tax rate for the thirteen weeks ended June 28, 2025 was higher than the tax rate for the thirteen weeks ended June 29, 2024, primarily due to a lower tax benefit from income tax accounting for stock-based compensation in the current-year period. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts expected to be realized. To this end, the Company has considered and evaluated its sources of taxable income, including forecasted future taxable income, and has concluded that a valuation allowance was not required as of June 28, 2025. The Company will continue to evaluate the need for a valuation allowance at each period end. The Company’s policy is to accrue interest and penalties related to unrecognized tax benefits as a component of income tax expense. At June 28, 2025 and March 29, 2025, the Company had no accrued liability for penalties and interest. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. As of June 28, 2025, the Company was not aware of any ongoing state tax examinations. As of June 28, 2025, the Company was informed that the Internal Revenue Service will be examining the fiscal 2023 tax year but has not accrued any additional tax liability in connection therewith. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which enacts significant changes to U.S. tax and related laws. Some of the provisions of the OBBBA affecting corporations include but are not limited to permanent extension, with modifications, of the Foreign Derived Intangible Income (“FDII”) tax provision, increasing the limit of the deduction of interest expense deduction to thirty percent of EBITDA, and one hundred percent bonus depreciation on eligible property acquired after January 19, 2025. The Company is currently evaluating the impacts that the OBBBA may have on its financial condition and results of operations. |