Income Taxes

6 Months Ended

Feb. 25, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our effective tax rate was 24.3% and 24.0% for the three months ended February 25, 2023 and February 26, 2022, respectively, and 24.4% and 23.6% for the six months ended February 25, 2023 and February 26, 2022, respectively. The increase in tax rate for the three months ended February 25, 2023 compared to the three months ended February 26, 2022 was driven primarily by the impact of a favorable reserve release in the prior year. The increase in tax rate for the six months ended February 25, 2023 compared to the six months ended February 26, 2022 was driven primarily by the impact of both a net favorable impact related to stock compensation and a favorable reserve release in the prior year.

On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law in the United States. Among other provisions, the IRA includes a 15% corporate minimum tax rate applied to certain large corporations and a 1% excise tax on corporate stock repurchases made after December 31, 2022. We do not expect the IRA to have a material impact on our consolidated financial statements.

We file a U.S. Federal tax return, as well as returns in various international and state jurisdictions. As of February 25, 2023, our Federal returns from Fiscal 2019 to present are subject to review by the Internal Revenue Service. With limited exceptions, state returns from Fiscal 2018 to present continue to be subject to review by state taxing jurisdictions. We are currently under review by certain U.S. state tax authorities for Fiscal 2019 through Fiscal 2021. We believe we have adequately reserved for our exposure to potential additional payments for uncertain tax positions in our liability for unrecognized tax benefits.