Note 8 - Income Taxes

12 Months Ended

May 01, 2021

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8. INCOME TAXES

The provision for income taxes consisted of the following:

	(In thousands)
	Fiscal		Fiscal			Fiscal
	2021		2020			2019
Current	$	51,520	$	40,647		$	39,673
Deferred		2,471		(1,164	)		3,351
Total	$	53,991	$	39,483		$	43,024

Deferred taxes are recorded to give recognition to temporary differences between the tax bases of assets or liabilities and their reported amounts in the financial statements. Valuation allowances are established to reduce the carrying amounts of deferred tax assets when it is deemed more likely than not that the benefit of deferred tax assets will not be realized. Deferred tax assets and liabilities as of May 1, 2021 and May 2, 2020 consisted of the following:      

	(In thousands)
	2021		2020
Deferred tax assets:
Accrued expenses and other	$	3,347	$	4,930
Inventory and amortizable assets		544		565
Total deferred tax assets		3,891		5,495
Deferred tax liabilities:
Property		18,814		18,872
Intangibles and other		2,371		1,446
Total deferred tax liabilities		21,185		20,318
Net deferred tax liabilities	$	17,294	$	14,823

The reconciliation of the statutory federal income tax rate to our effective tax rate is as follows:

	Fiscal			Fiscal			Fiscal
	2021			2020			2019
Statutory federal income tax rate		21.0	%		21.0	%		21.0	%
State income taxes, net of federal benefit		2.9			2.9			2.9
Domestic manufacturing deduction benefit		-			-			-
Re-measurement of deferred taxes		-			-			-
Other differences		(.2	)		(.6	)		(.5	)
Effective income tax rate		23.7	%		23.3	%		23.4	%

As of May 1, 2021, the gross amount of unrecognized tax benefits was $2.0 million and $53,000 was recognized as tax expense in Fiscal 2021. If the Company is to prevail on all uncertain tax positions, the net effect would be to reduce our tax expense by approximately $1.7 million. A reconciliation of the changes in the gross amount of unrecognized tax benefits, which amounts are included in other liabilities in the accompanying consolidated balance sheets, is as follows:

	(In thousands)
	Fiscal			Fiscal			Fiscal
	2021			2020			2019
Beginning balance	$	1,974		$	1,868		$	1,733
Increases due to current period tax positions		150			120			139
Decreases due to lapse of statute of limitations and audit resolutions		(69	)		(14	)		(4	)
Ending balance	$	2,055		$	1,974		$	1,868

Accrued interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense. As of May 1, 2021, unrecognized tax benefits included accrued interest of $258,000, of which approximately $9,000 was recognized as tax expense in Fiscal 2021.

Annual income tax returns are filed in the United States and in various state and local jurisdictions. A number of years may elapse before an uncertain tax position, for which the Company has unrecognized tax benefits, are resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax positions, the Company believes that unrecognized tax benefits reflect the most probable outcome. The Company adjusts these unrecognized tax benefits, as well as the related interest, in light of changing facts and circumstances. The resolution of any particular uncertain tax position could require the use of cash and an adjustment to our provision for income taxes in the period of resolution. Federal income tax returns for years subsequent to Fiscal 2016 are subject to examination. Generally, the income tax returns for the various state jurisdictions are subject to examination for years ending after Fiscal 2014.