Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes:

The provision for income taxes for the years ended December 31 consist of the following:

(In thousands)	2022		2021		2020
Current
Federal	$	25,318	$	22,832	$	16,831
State	4,241		4,666		3,210
	29,559		27,498		20,041
Deferred
Federal	(628)		589		(1,217)
State	1,212		(355)		(1,241)
	584		234		(2,458)
Total income tax expense	$	30,143	$	27,732	$	17,583

The differences between income tax expense in the accompanying Consolidated Financial Statements and the amount computed by applying the statutory Federal income tax rate are as follows:

(In thousands)	2022		2021		2020
Statutory rates applied to income before income taxes	$	25,095	$	24,949	$	16,164
State income taxes, net of Federal tax benefit	4,888		3,836		2,057
State tax credits	(494)		(481)		(1,206)
Other	654		(572)		568
	$	30,143	$	27,732	$	17,583

Our effective tax rate differs from the federal statutory rate primarily due to state income taxes. In 2020, we completed the computations and recorded in the fourth quarter, state quality jobs credits of $1,527,000 generated in 2018, 2019, and 2020.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The amounts in the following table are grouped based on broad categories of items that generate the deferred tax assets and liabilities.

(In thousands)	2022		2021
Deferred tax assets:
Property and equipment	$	7,414	$	6,944
Lease liabilities	55,322		57,588
Accrued liabilities	11,786		11,306
Retirement benefits	60		573
State tax credits	1,158		2,087
Other	702		676
Total deferred tax assets	76,442		79,174
Deferred tax liabilities:
Inventory related	7,058		6,389
Right-of-use lease assets	53,320		55,816
Other	563		594
Total deferred tax liabilities	60,941		62,799
Net deferred tax assets	$	15,501	$	16,375

We review our deferred tax assets to determine the need for a valuation allowance. Based on evidence, we concluded that it is more-likely-than-not that our deferred tax assets will be realized and therefore a valuation allowance is not required.

We file income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. With respect to U.S. federal, state and local jurisdictions, with limited exceptions, we are no longer subject to income tax audits for years before 2019.

Uncertain Tax Positions

Interest and penalties associated with uncertain tax positions, if any, are recognized as components of income tax expense. No amounts for uncertain tax positions were recorded for the years currently open under statute of limitations.

Cares Act

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary suspension of certain payment requirements for the employer-paid portion of social security taxes, the creation of certain refundable employee retention credits, and technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property. We elected to defer the employer-paid portion of social security taxes beginning with pay dates on and after April 1, 2020 and through December 31, 2020 and deferred $1,607,000 which was repaid in 2021. During 2020, we recorded $2,301,000 for refundable employee retention credits reducing selling, general and administrative expenses.