Income Taxes

3 Months Ended

Dec. 02, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

During the thirteen-week period ended December 2, 2023, there were no material changes in unrecognized tax benefits.

The United States government enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) to provide certain relief as a result of the COVID-19 pandemic. The CARES Act provides tax relief, along with other stimulus measures, including the Employee Retention Credit (the “ERC”) provision, which allows for employers to claim a refundable tax credit against the employer share of Social Security taxes equal to 50% of qualified wages paid to qualified employees between March 13, 2020 and December 31, 2020 and 70% of qualified wages paid to qualified employees after December 31, 2020 through September 30, 2021. The ERC was designed to encourage businesses to keep employees on the payroll during the COVID-19 pandemic. During fiscal year 2023, the Company received funds related to ERC claims previously submitted. As there is no authoritative guidance under accounting principles generally accepted in the United States of America on accounting for government assistance to for-profit business entities, the Company accounts for the

ERC by analogy to International Accounting Standard 20, Accounting for Government Grants and Disclosure of Government Assistance. Management determined the probability threshold has not been met for $5,129 of the funds received in fiscal year 2023, and, as such, that portion of the funds remains in accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheet as of December 2, 2023. This amount will be recognized in the Condensed Consolidated Statement of Income when the probability threshold has been met, which the Company has determined to be the earlier of a completed audit or the lapse of the relevant statute of limitations.

The Company’s effective tax rate was 24.3% for the thirteen-week period ended December 2, 2023, as compared to 24.7% for the thirteen-week period ended December 3, 2022. The effective tax rate is higher than the federal statutory tax rate primarily due to state taxes.