Income Taxes	9 Months Ended
Oct. 07, 2018
Income Taxes
Income Taxes	7. Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. The Tax Act includes a number of provisions, including (1) the lowering of the U.S. corporate tax rate from 35% to 21%; (2) elimination of the corporate alternative minimum tax (AMT); (3) the creation of the base erosion anti-abuse tax (BEAT, a new minimum tax), a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (4) a new provision designed to tax global intangible low-taxed income (GILTI), which allows for the possibility of using foreign tax credits (FTCs) and a deduction of up to 50 percent to offset the income tax liability (subject to some limitations); (5) a new limitation on deductible interest expense; (6) the repeal of the domestic production activity deduction; and (7) limitations on the deductibility of certain executive compensation. The Company's effective tax rate for the forty weeks ended October 7, 2018 and October 8, 2017 was 3.1% and 5.2%, respectively. The Company recorded income tax expense of $305,000 for the forty weeks ended October 7, 2018 on income before income taxes of $10.0 million. Income tax expense for the forty weeks ended October 7, 2018 was different than the U.S. federal statutory income tax rate of 21% primarily due to favorable “return-to-provision” adjustments and certain tax credits, partially offset by the unfavorable impact of the new executive compensation limitations, state income tax expense, stock option award exercises and vesting of restricted stock awards. The Company recorded income tax expense of $419,000 for the forty weeks ended October 8, 2017 on income before income taxes of $8.1 million. The income tax expense for the forty weeks ended October 8, 2017 was different than the U.S. federal statutory income tax rate of 35% primarily due to favorable excess tax benefits from stock option award exercises and restricted stock vesting, partially offset by the unfavorable impact of executive compensation limitations and state income tax expense. On the enactment date of the Tax Act, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. As of December 31, 2017, the Company was able to reasonably estimate certain Tax Act effects and, therefore, recorded provisional adjustments associated with the deemed repatriation transition tax and remeasurement of certain deferred tax assets and liabilities. As of October 7, 2018, the Company finalized the accounting for the federal transition tax liability and recorded a measurement period adjustment for the change from our provisional estimate, which resulted in a tax benefit of $153,000. The Company’s accounting for the Tax Act is incomplete for the remeasurement of deferred taxes and the previously disclosed provisional amount continues to be provisional and will be adjusted, if necessary, based on our ongoing analysis of the Tax Act and new regulatory guidance or other interpretations of the Tax Act. The accounting for this item must be completed within the measurement period defined by SAB 118, not longer than one year from the period in which the Tax Act was enacted. The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and Mexico. The Company’s federal tax return for the 2016 fiscal year was under examination by the Internal Revenue Service ("IRS") but this examination has been subsequently closed by the IRS. The Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2013. The tax years which remain subject to examination or are being examined by major tax jurisdictions as of October 7, 2018 include fiscal years 2013 through 2016 for state purposes and 2014, 2015, 2016 and 2017 for federal purposes.

7. Income Taxes

On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. The Tax Act includes a number of provisions, including (1) the lowering of the U.S. corporate tax rate from 35% to 21%; (2) elimination of the corporate alternative minimum tax (AMT); (3) the creation of the base erosion anti-abuse tax (BEAT, a new minimum tax), a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (4) a new provision designed to tax global intangible low-taxed income (GILTI), which allows for the possibility of using foreign tax credits (FTCs) and a deduction of up to 50 percent to offset the income tax liability (subject to some limitations); (5) a new limitation on deductible interest expense; (6) the repeal of the domestic production activity deduction; and (7) limitations on the deductibility of certain executive compensation.

The Company's effective tax rate for the forty weeks ended October 7, 2018 and October 8, 2017 was 3.1% and 5.2%, respectively. The Company recorded income tax expense of $305,000 for the forty weeks ended October 7, 2018 on income before income taxes of $10.0 million. Income tax expense for the forty weeks ended October 7, 2018 was different than the U.S. federal statutory income tax rate of 21% primarily due to favorable “return-to-provision” adjustments and certain tax credits, partially offset by the unfavorable impact of the new executive compensation limitations, state income tax expense, stock option award exercises and vesting of restricted stock awards. The Company recorded income tax expense of $419,000 for the forty weeks ended October 8, 2017 on income before income taxes of $8.1 million. The income tax expense for the forty weeks ended October 8, 2017 was different than the U.S. federal statutory income tax rate of 35% primarily due to favorable excess tax benefits from stock option award exercises and restricted stock vesting, partially offset by the unfavorable impact of executive compensation limitations and state income tax expense.

On the enactment date of the Tax Act, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. As of December 31, 2017, the Company was able to reasonably estimate certain Tax Act effects and, therefore, recorded provisional adjustments associated with the deemed repatriation transition tax and remeasurement of certain deferred tax assets and liabilities. As of October 7, 2018, the Company finalized the accounting for the federal transition tax liability and recorded a measurement period adjustment for the change from our provisional estimate, which resulted in a tax benefit of $153,000. The Company’s accounting for the Tax Act is incomplete for the remeasurement of deferred taxes and the previously disclosed provisional amount continues to be provisional and will be adjusted, if necessary, based on our ongoing analysis of the Tax Act and new regulatory guidance or other interpretations of the Tax Act. The accounting for this item must be completed within the measurement period defined by SAB 118, not longer than one year from the period in which the Tax Act was enacted.

The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and Mexico. The Company’s federal tax return for the 2016 fiscal year was under examination by the Internal Revenue Service ("IRS") but this examination has been subsequently closed by the IRS. The Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2013. The tax years which remain subject to examination or are being examined by major tax jurisdictions as of October 7, 2018 include fiscal years 2013 through 2016 for state purposes and 2014, 2015, 2016 and 2017 for federal purposes.