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Income Taxes
3 Months Ended
Apr. 01, 2018
Income Tax Disclosure [Abstract]  
Income Taxes

6. Income Taxes

On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was enacted into law, which changes various corporate income tax provisions within the existing Internal Revenue Code.

The most significant changes that impact the Company are the reduction in the corporate federal income tax rate from 35% to 21% and 100% bonus depreciation for qualified property acquired and placed in service after September 27, 2017 and before January 1, 2023.

Under the guidance set forth in the SEC's Staff Accounting Bulletin No. 118 (“SAB 118”), the Company may record provisional amounts for the impact of the Tax Act. In 2017, the Company had substantially completed the measurement and made a provisional and reasonable estimate of the effects of the Tax Act on its existing deferred tax balances. The final impact of the Tax Act may differ due to changes in interpretations and assumptions the Company has made and guidance that may be issued. In accordance with SAB 118, future adjustments to the provisional numbers will be recorded as discrete adjustments to income tax expense in the period in which those adjustments become estimable and finalized. As of April 1, 2018 the Company has not made any changes to the provisional and estimated amounts.

The Company’s effective tax rate decreased to 9.8% for the thirteen weeks ended April 1, 2018 from 31.8% for the thirteen weeks ended April 2, 2017 primarily due to the enactment of the Tax Act as disclosed above and the recognition of excess tax benefits related to the exercise of stock options in the income tax provision.

Excess tax benefits associated with share-based payment awards are recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards are treated as discrete items in the reporting period in which they occur. The income tax benefits resulting from excess tax benefits of share-based payment awards were $11.1 million and $3.8 million for the thirteen weeks ended April 1, 2018 and April 2, 2017, respectively.