Note 10 - Income Taxes

3 Months Ended

May 29, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

10. INCOME TAXES

For the 13 weeks ended May 29, 2022, the Company recorded income tax provision of $682, which included discrete income tax provisions of $28. For the 13 weeks ended May 30, 2021, the Company recorded income tax provision of $1,182, which included discrete income tax provisions of $143.

The Company’s effective tax rates for the 13 weeks ended May 29, 2022 were 26.3% compared to 30.0% in the comparable prior year period. The effective tax rate for the 13 weeks ended May 29, 2022 were higher than the U.S. statutory rate of 21% primarily due to state and local taxes and discrete income tax provisions for the accrual of interest related to unrecognized tax benefits. The effective rate for the 13 weeks ended May 30, 2021 was higher than the U.S. statutory rate of 21% primarily due to state and local taxes and a discrete income tax provision for the write-off of deferred tax assets and liabilities related to our closed Singapore facility and the accrual of interest related to unrecognized tax benefits.

Notwithstanding the U.S. taxation of the deemed repatriated earnings as a result of the mandatory one-time transition tax on the accumulated untaxed earnings of foreign subsidiaries of U.S. shareholders included in the 2017 Tax Cuts and Jobs Act, the Company intends to indefinitely invest approximately $25 million of undistributed earnings outside of the U.S. If these future earnings are repatriated to the U.S., or if the Company determines such earnings will be remitted in the foreseeable future, the Company may be required to accrue U.S. deferred taxes on such earnings.