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Income Taxes
6 Months Ended
Jul. 13, 2013
Income Taxes

14. INCOME TAXES

The company’s effective tax rate for the twenty-eight weeks ending July 13, 2013 was 27.0%, significantly lower than the rate of 36.0% for the twenty-eight weeks ending July 14, 2012. This decrease was driven by the gain on acquisition, which was recorded net of deferred taxes as a component of income before income taxes. The gain was treated as a permanent item in the tax provision, and favorably impacts the rate by approximately 8%. The other primary differences in the effective rate and the statutory rate are state income taxes and the Section 199 qualifying production activities deduction. Tax legislation adopted in January of 2013 had an immaterial impact on the rate.

During the twenty-eight weeks ended July 13, 2013, the company’s activity with respect to its FIN 48 reserve and related interest expense accrual was immaterial. At this time, we do not anticipate significant changes to the amount of gross unrecognized tax benefits over the next twelve months.