Income Taxes

12 Months Ended

Feb. 01, 2020

(9)

Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible.

As of February 1, 2020, no valuation allowance has been provided for net deferred tax assets as management believes that it is more likely than not that the Company will realize all deferred tax assets as of February 1, 2020.

The components of the income tax expense are as follows (in thousands):



	Fiscal Year
	2019		2018			2017
Current:
Federal	$	25,069	$	33,297		$	45,867
State	6,602		8,315			6,168
	31,671		41,612			52,035
Deferred:
Federal	13,487		2,000			4,606
State	1,355		(1,450		)	(243		)
	14,842		550			4,363
Income tax expense	$	46,513	$	42,162		$	56,398

The reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate is as follows:



	Fiscal Year
	2019		2018		2017
Statutory federal tax rate	21.0	%	21.0	%	33.7	%
State taxes, net of federal benefit	2.8		2.8		2.4
Other ⁽¹⁾	(2.8	)	(1.8	)	(0.6	)
	21.0	%	22.0	%	35.5	%


(1)	Other line includes excess tax benefits relating to share-based payment accounting.

The effective tax rate for fiscal 2019 compared to fiscal 2018 was primarily driven by discrete items, which includes the impact of ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting" with respect to the requirements to recognize excess income tax benefits or deficiencies as income tax benefit or expense in the consolidated statements of operations rather than as additional paid-in capital in the consolidated balance sheets. The effective tax rate for fiscal 2018 compared to fiscal 2017 was primarily driven by the impact of tax reform as a result of the TCJA and the adoption of ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting."

The tax effects of temporary differences that give rise to deferred tax assets and liabilities are (in thousands):



	February 1, 2020			February 2, 2019
	February 1, 2020			February 2, 2019
Deferred tax assets:
Inventories	$	13,182		$	9,633
Deferred revenue	1,255			472
Accrued bonus	1,007			3,553
Deferred rent	—			24,136
Operating lease liabilities	242,432			—
Other	5,208			4,848
Deferred tax assets	263,084			42,642
Deferred tax liabilities:
Property and equipment	(55,953		)	(35,642		)
Operating lease assets	(214,935		)	—
Other	(912		)	(874		)
Deferred tax liabilities	(271,800		)	(36,516		)
	$	(8,716	)	$	6,126

The Company had no material accrual for uncertain tax positions or interest or penalties related to income taxes on the Company’s balance sheets as of February 1, 2020 and February 2, 2019, and has not recognized any material uncertain tax positions or interest and/or penalties related to income taxes in the consolidated statements of operations for fiscal 2019, fiscal 2018, or fiscal 2017.

The Company files a federal income tax return as well as state tax returns. The Company’s U.S. federal income tax returns for the fiscal years ended February 3, 2018 and thereafter remain subject to examination by the U.S. Internal Revenue Service. State returns are filed in various state jurisdictions, as appropriate, with varying statutes of limitation and remain subject to examination for varying periods up to three years to four years depending on the state.