INCOME TAXES

12 Months Ended

Sep. 30, 2023

Income Tax [Abstract]

INCOME TAXES

NOTE 12. INCOME TAXES

The components of our provision for income taxes for our fiscal years 2023 and 2022 are as follows:

	(in thousands)
	2023		2022
Current:
Federal	$	298	$	302
State		289		262
Deferred:		587		564
Federal		(84)		172
State		146		27
		62		199
	$	649	$	763

A reconciliation of income tax computed at the statutory federal rate to income tax expense is as follows:

	(in thousands)
	2023			2022
Tax provision at the statutory rate	$	1,273		$	2,061
Non-controlling interests		(297	)		(575	)
State income taxes, net of federal income tax		343			210
FICA tip credit		(799	)		(744	)
True up adjustment		89			43
PPP forgiveness		—			(252	)
Other permanent items, net		40			20
	$	649		$	763

We have deferred tax liabilities and assets which arise primarily due to depreciation recorded at different rates for tax and book purposes offset by cost basis differences in depreciable assets due to the deferral of the recognition of insurance recoveries on casualty losses for tax purposes, investments in and management fees paid by limited partnerships, accruals for potential uninsured claims, bonuses accrued for book purposes but not paid within two and a half months for tax purposes, the capitalization of certain inventory costs for tax purposes not recognized for financial reporting purposes, the recognition of revenue from gift cards not redeemed within twelve months of issuance, allowances for uncollectable receivables, unfunded limited retirement commitments and FICA tax credit.

The components of our deferred tax assets (liabilities) at September 30, 2023 and October 1, 2022 were as follows:

	(in thousands)
	2023			2022
Reversal of aged payables	$	18		$	18
Capitalized inventory costs		28			26
Accrued bonuses		66			84
Accruals for potential uninsured claims		13			19
Gift cards		223			198
Deferred revenue		179			—
Limited partnership management fees		(873	)		(862	)
Tip credit		570			71
Book/tax differences in property and equipment		(1,573	)		(1,106	)
Book/tax differences in operating leases		134			488
Limited partnership investments		475			394
Interest rate swaps		(134	)		—
Accrued limited retirement		73			65
Total Deferred Tax Liabilities, Net	$	(801	)	$	(605	)

As of September 30, 2023, the Company has federal general business credit carryforward of $570,000. General business credit carryovers can be carried back 1 year and carried forward 20 years. The company's general business credit carryforward will begin to expire in fiscal year 2040.