Note 9 - Income Taxes
|12 Months Ended|
Mar. 31, 2019
|Notes to Financial Statements|
|Income Tax Disclosure [Text Block]||
The Company’s income tax provision for the fiscal years ended
March 31, 2019and
April 1, 2018is summarized below (in thousands):
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of
March 31, 2019and
April 1, 2018are as follows (in thousands):
In assessing the probability that the Company’s deferred tax assets will be realized, management of the Company has considered whether it is more likely than
notthat some portion or all of the deferred tax assets will
notbe realized. The ultimate realization of deferred tax assets is dependent upon the generation of taxable income during the future periods in which the temporary differences giving rise to the deferred tax assets will become deductible. The Company has also considered the scheduled inclusion into taxable income in future periods of the temporary differences giving rise to the Company’s deferred tax liabilities. The valuation allowance as of
March 31, 2019and
April 1, 2018was related to state net operating loss carryforwards that the Company does
notexpect to be realized. Based upon the Company’s expectations of the generation of sufficient taxable income during future periods, the Company believes that it is more likely than
notthat the Company will realize its deferred tax assets, net of the valuation allowance and the deferred tax liabilities.
The Company’s policy is to recognize the effect that a change in enacted tax rates would have on net deferred income tax assets and liabilities in the period in which the tax rates are changed. On
December 22, 2017,the President of the United States signed into law the TCJA, which includes a provision to lower the federal corporate income tax rate to
21%effective as of
January 1, 2018.As the Company’s fiscal year
April 1, 2018,the lower corporate income tax rate was phased in, resulting in a blended federal statutory rate of
30.75%for fiscal year
The Company’s policy is to provide for deferred income taxes based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates that will be in effect when the differences are expected to reverse. The Company has recognized the effect of the TCJA on the Company’s net deferred income tax assets, which as of
October 2, 2017and
April 2, 2017had been recorded based upon the pre-TCJA enacted composite federal, state and foreign income tax rate of approximately
37.5%that would have been applied as the financial statement and tax differences began to reverse. Because most of these differences are now estimated to reverse at a composite rate of approximately
24.5%,the Company was required to revalue its net deferred income tax assets. This revaluation resulted in a discrete charge to income tax expense of
$377,000during fiscal year
Management evaluates items of income, deductions and credits reported on the Company’s various federal and state income tax returns filed and recognizes the effect of positions taken on those income tax returns only if those positions are more likely than
notto be sustained. The Company applies the provisions of FASB ASC Sub-topic
25,which requires a minimum recognition threshold that a tax benefit must meet before being recognized in the financial statements. Recognized income tax positions are measured at the largest amount that has a greater than
50%likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
The following table sets forth the reconciliation of the beginning and ending amounts of unrecognized tax benefits for fiscal years
In evaluating the process regarding the calculation of the state portion of its income tax provision, the Company has taken a tax position that reflects opportunities for more favorable state apportionment percentages, which were applied to several prior fiscal years and to succeeding fiscal years. After considering all relevant information, the Company believes that the technical merits of this tax position would more likely than
notbe sustained. However, the Company also believes that the ultimate resolution of the tax position will result in a tax benefit that is less than the full amount realized through the application of the more favorable state apportionment percentages. Therefore, the Company’s measurement regarding the tax impact of the revised state apportionment percentages resulted in the Company recording discrete reserves for unrecognized tax liabilities during fiscal years
$113,000,respectively. Because the tax impact of the revised state apportionment percentages are measured net of federal income taxes, the provision in the TCJA that lowered the federal corporate income tax rate to
21%required the Company to revalue its reserve for unrecognized tax liabilities. This revaluation resulted in a net discrete charge to income tax expense of
The Company’s policy is to accrue interest expense and penalties as appropriate on any estimated unrecognized tax liabilities as a charge to interest expense in the Company’s consolidated statements of income. During fiscal years
2018,the Company accrued
$96,000,respectively, for interest expense and penalties on the portion of the unrecognized tax liabilities that has been refunded to the Company but for which the relevant statute of limitations remained unexpired.
Nointerest expense or penalties are accrued with respect to estimated unrecognized tax liabilities that are associated with state income tax overpayments that remain receivable.
The Company's provision for income taxes is based upon effective tax rates of
44.3%in fiscal years
2018,respectively. These effective tax rates are the sum of the top U.S. statutory federal income tax rate and a composite rate for state income taxes, net of federal tax benefit, in the various states in which the Company operates, plus the net effect of various discrete items.
The following table reconciles income tax expense on income from continuing operations at the U.S. federal income tax statutory rate to the net income tax provision reported for fiscal years
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef