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Income Taxes
6 Months Ended
Jun. 30, 2015
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
For the 26 weeks ended June 30, 2015, the Company recorded an income tax benefit of $0.5 million compared to an income tax benefit of $1.1 million for the same period of the prior year. The tax benefit for the 26 weeks ended June 30, 2015 was primarily due to federal employment-related tax credits in relation to projected pre-tax income. The tax benefit for the 26 weeks ended
June 30, 2015 was determined by applying the estimated annual tax rate to interim financial results.
Accounting Standards Codification 740 (“ASC 740”), requires companies to apply their estimated annual tax rate on a year-to-date basis in each interim period. Under ASC 740, companies should not apply the estimated annual tax rate to interim financial results if the estimated annual tax rate is not reliably predictable. In this situation, the interim tax rate should be based on the actual year-to-date results. For the 26 weeks ended July 1, 2014, a reliable projection of the Company’s annual effective rate was difficult to determine, producing significant variations in the customary relationship between income tax expense and pre-tax book income. As such, the Company recorded an income tax benefit of $2.3 million for the 26 weeks ended July 1, 2014 based on actual year-to-date results. This benefit was primarily related to federal employment-related tax credits and was partially offset by income tax expense of $1.2 million for an adjustment to deferred taxes for a change in the applicable state income tax rate.
The Company files a consolidated US federal tax return with its parent company, NPC Holdings. The Company allocates taxes between it and the Parent utilizing the separate return method.
The liability for uncertain tax positions was $2.7 million and $2.8 million at June 30, 2015 and December 30, 2014, respectively.