Income Taxes

9 Months Ended

Oct. 02, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s effective tax rate for the three months ended October 2, 2022 and October 3, 2021 was 26.9% and 24.3%, respectively. The Company’s effective tax rate varied from the U.S. federal statutory rate of 21% for the three months ended October 2, 2022 primarily due to state income taxes, including discrete changes to state deferred income taxes, and tax effects of our foreign operations.

The Company’s effective tax rate for the nine months ended October 2, 2022 and October 3, 2021 was 26.6% and 21.8%, respectively. The Company’s effective tax rate varied from the U.S. federal statutory rate of 21% for the nine months ended October 2, 2022 primarily due to state income taxes, including discrete changes to state deferred income taxes.

Unrecognized tax benefits for the Company decreased $1,225 and $1,175 during the three and nine months ended October 2, 2022, respectively. The decrease was primarily related to a state tax law change and the lapse of statutes of limitations during the third quarter of 2022. During the next twelve months, we believe it is reasonably possible the Company will reduce unrecognized tax benefits by up to $308 due to lapses of statutes of limitations.

The current portion of refundable income taxes was $7,136 and $11,901 as of October 2, 2022 and January 2, 2022, respectively, and is included in “Accounts and notes receivable, net.” There were no long-term refundable income taxes as of October 2, 2022 and January 2, 2022.