Note J - Income Taxes

12 Months Ended

Mar. 29, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE J - INCOME TAXES

The income tax provision consists of the following for the fiscal years ended March 29, 2015, March 30, 2014 and March 31, 2013:          

	March 29, 2015		March 30, 2014		March 31, 2013
Federal
Current	$	5,992	$	2,664	$	3,237
Deferred		60		1,421		377
		6,052		4,085		3,614
State and local
Current		1,599		918		937
Deferred		51		231		120
		1,650		1,149		1,057
	$	7,702	$	5,234	$	4,671

The total income tax provision for the fiscal years ended March 29, 2015, March 30, 2014 and March 31, 2013 differs from the amounts computed by applying the United States Federal income tax rates of 35%,

34% and 34%, respectively, to income before income taxes as a result of the following:

	March 29 , 201 5			March 30, 2014			March 31, 2013
Computed “expected” tax expense	$	6,792		$	4,611		$	4,127
State and local income taxes, net of Federal income tax benefit		1,112			773			633
Tax-exempt investment earnings		(63	)		(110	)		(133	)
Change in uncertain tax positions, net		(62	)		(22	)		22
Nondeductible meals and entertainment and other		(77	)		(18	)		22
	$	7,702		$	5,234		$	4,671

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:

	March 29 ,			March 30,
	201 5			2014
Deferred tax assets
Accrued expenses	$	145		$	162
Allowance for doubtful accounts		52			49
Deferred revenue		432			569
Deferred stock compensation		223			594
Excess of straight line over actual rent		412			289
Investment		152			157
Other		140			129
Total gross deferred tax assets	$	1,556		$	1,949
Deferred tax liabilities
Deductible prepaid expense		288			302
Unrealized gain on marketable securities		16			83
Depreciation expense		1,692			1,692
Deductible business interruption expenses		-			293
Amortization		311			287
Total gross deferred tax liabilities		2,307			2,657
Net deferred tax (liability)		(751	)		(708	)
Less current portion		(277	)		(26	)
Long-term portion	$	(1,028	)	$	(734	)

A valuation allowance is provided when it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. We consider the level of historical taxable income, scheduled reversal of temporary differences, tax planning strategies and projected future taxable income in determining whether a valuation allowance is warranted. Based upon these considerations, management believes that it is more likely than not that the Company will realize the benefit of its gross deferred tax asset.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits, excluding interest and penalties, for the fiscal years ended March 29, 2015, March 30, 2014 and March 31, 2013.

	March 29, 2015			March 30, 2014			March 31, 2013
Unrecognized tax benefits, beginning of year	$	283		$	296		$	422
Decreases of tax positions taken in prior years		(64	)		(34	)		(50	)
Increases based on tax positions taken in current year		47			21			34
Settlements of tax positions taken in prior years		-			-			(110	)
Unrecognized tax benefits, end of year	$	266		$	283		$	296

The amount of unrecognized tax benefits at March 29, 2015, March 30, 2014 and March 31, 2013 were $266, $283 and $296, respectively, all of which would impact Nathan’s effective tax rate, if recognized. As of March 29, 2015 and March 30, 2014, the Company had $289

and $329, respectively, accrued for the payment of interest and penalties. For the fiscal years ended March 29, 2015, March 30, 2014 and March 31, 2013 Nathan’s recognized interest and penalties in the amounts of $44, $43, and $46, respectively. The Company believes that it is reasonably possible that decreases in unrecognized tax benefits of up to

$

98 may be recorded within the next year.

In May 2014, Nathan’s received notification from the Internal Revenue Service that it is seeking to review its tax return for the year ended March 31, 2013. The earliest tax years’ that are subject to examination by taxing authorities by major jurisdictions are as follows:

Jurisdiction	Fiscal Year
Federal	2012
New York State	2012
New York City	2012