Income Tax

6 Months Ended

Jul. 03, 2011

Income Tax

Income Tax

10. Income Tax

A reconciliation of the statutory federal income tax rate to the Company's effective tax rate for the three and six months ended July 3, 2011 and July 4, 2010 is as follows:

	Three Months Ended						Six Months Ended
	July 3, 2011						July 3, 2011
	(in thousands)			Tax rate %			(in thousands)			Tax rate %
Tax at statutory federal rate	$	13,109			35.0	%	$	13,364			35.0	%
State and local tax, net of federal benefit		600			1.6	%		1,036			2.7	%
Other		83			0.2	%		142			0.4	%
Tax expense per financial statement	$	13,792			36.8	%	$	14,542			38.1	%
	Three Months Ended						Six Months Ended
	July 4, 2010						July 4, 2010
	(in thousands)			Tax rate %			(in thousands)			Tax rate %
Tax at statutory federal rate	$	(854	)		35.0	%	$	(3,655	)		35.0	%
State and local tax, net of federal benefit		293			(12.0	)%		576			(5.5	)%
Other		37			(1.5	)%		(463	)		4.4	%
Tax benefit per financial statement	$	(524	)		21.5	%	$	(3,542	)		33.9	%

Included in our provision for income tax is a tax imposed by the state of Texas of 0.5% of gross margin in Texas ("margin tax"). The margin tax accrued for the six months ended July 4, 2010 and July 3, 2011 was $0.9 million and $1.1 million, respectively.

It is the Company's policy to recognize interest and penalties related to uncertain tax positions in general and administrative expense. The Company became a taxpayer at October 24, 2006 with the conversion to a "C" corporation, and the statute of limitations remains open on all years since then. The Company files income and gross margin tax returns in the U.S. federal jurisdiction, Texas, Oklahoma, New Mexico and Louisiana. The Company is subject to examinations in all jurisdictions for all returns filed since October 24, 2006.

As of July 3, 2011, all tax positions taken by the Company are considered highly certain. There are no positions the Company reasonably anticipates will significantly increase or decrease within 12 months of the reporting date, and therefore no adjustments have been recorded related to unrecognized tax benefits.