Income Taxes (Tables)

12 Months Ended

Jan. 02, 2021

Income Tax Disclosure [Abstract]

Summary of Income Tax Expense (Benefit)

Income tax expense consisted of the following (in thousands):

	2020		2019		2018
Current:
Federal	$	29,762	$	12,299	$	12,483
State	6,528		3,293		2,871
	36,290		15,592		15,354
Deferred:
Federal	584		2,591		708
State	(91)		480		920
	493		3,071		1,628
Income tax expense	$	36,783	$	18,663	$	16,982

Reconciliation of Income Tax Expense (Benefit) at the Statutory Federal Rate

The following table provides a reconciliation between the statutory federal income tax rate and our effective income tax rate:

	2020		2019		2018
Statutory federal income tax	21.0	%	21.0	%	21.0	%
State income taxes, net of federal benefit	2.4		3.6		3.3
Stock-based compensation	(2.4)		(4.3)		(1.1)
R&D tax credits	(1.4)		(2.2)		(2.0)
Non-deductible compensation	1.0		—		—
Changes in unrecognized tax benefits	0.3		(0.5)		1.2
Tax Cuts and Jobs Act effects	—		—		(3.9)
Other	—		1.0		1.1
Effective income tax rate	20.9	%	18.6	%	19.6	%

Summary of Deferred Income Taxes

The tax effects of temporary differences that give rise to deferred income taxes were as follows (in thousands):

	2020		2019
Deferred tax assets:
Stock-based compensation	$	7,518	$	8,342
Operating lease liabilities	86,692		90,059
Warranty and returns liabilities	8,496		7,215
Net operating loss carryforwards and credits	2,027		1,987
Compensation and benefits	6,045		4,698
Other	7,440		3,953
Total gross deferred tax assets	118,218		116,254
Valuation allowance	(615)		(615)
Total gross deferred tax assets after valuation allowance	117,603		115,639
Deferred tax liabilities:
Property and equipment	31,881		30,274
Operating lease right-of-use assets	78,824		82,340
Deferred revenue	4,987		3,859
Other	2,153		2,974
Total gross deferred tax liabilities	117,845		119,447
Net deferred tax liabilities	$	(242)	$	(3,808)

Summary of Reconciliations Unrecognized Tax Benefits

Reconciliations of the beginning and ending amounts of unrecognized tax benefits were as follows (in thousands):

	Federal and State Tax
	2020		2019		2018
Beginning balance	$	3,337	$	3,866	$	2,839
Increases related to current-year tax positions	860		638		778
Increases related to prior-year tax positions	27		134		595
Decreases related to prior-year tax positions	—		(363)		—
Lapse of statute of limitations	(312)		(663)		(333)
Settlements with taxing authorities	—		(275)		(13)
Ending balance	$	3,912	$	3,337	$	3,866