Income Taxes

6 Months Ended

Mar. 27, 2020

Income Tax Disclosure [Abstract]

Income Taxes

8. INCOME TAXES    

On March 27, 2020, President Trump signed into U.S. federal law the CARES Act, which is aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the COVID-19 pandemic and generally supporting the U.S. economy. The CARES Act, among other things, includes provisions related to refundable payroll tax credits, deferment of the employer portion of social security payments, net operating loss carryback periods, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. While we are still assessing the impact of the legislation, we do not expect there to be a material impact to our consolidated financial statements at this time.

For the three months ended March 27, 2020 and March 29, 2019, the Company's effective tax rate attributable to income before income taxes was 25.1% and 25.8%, respectively. For the three months ended March 27, 2020 and March 29, 2019, the Company's income tax expense was $13,100 and $10,253 respectively. The decrease in the current period effective tax rate was primarily due to an increase in the excess tax benefit associated with stock compensation.

For the six months ended March 27, 2020 and March 29, 2019, the Company's effective tax rate attributable to income before income taxes was 21.6% and 24.6%, respectively. For the six months ended March 27, 2020 and March 29, 2019, the Company's income tax expense was $20,440 and $18,407 respectively. The decrease in the current period effective tax rate was primarily due to an increase in the excess tax benefit associated with stock compensation.

A valuation allowance has been recorded against certain net operating losses in certain foreign jurisdictions.  A valuation allowance is recorded when it is determined to be more likely than not that these assets will not be fully realized in the foreseeable future. The realization of deferred tax assets is dependent upon whether the Company can generate future taxable income in the appropriate character and jurisdiction to utilize the assets. The amount of the deferred tax assets considered realizable is subject to adjustment in future periods.

The Company recognizes the benefits of uncertain tax positions taken or expected to be taken in tax returns in the provision for income taxes only for those positions that we have determined are more likely than not to be realized upon examination. We record interest and penalties related to unrecognized tax benefits as a component of income tax expense. During the six months ended March 27, 2020, the balance of unrecognized tax benefits decreased by $108 upon the resolution of a state audit item.

For the six months ended March 27, 2020, the Company made no additional provision for U.S. or non-U.S. income taxes for unrecognized deferred tax liabilities for temporary differences related to basis differences in investments in subsidiaries, as the investments are essentially permanent in duration.