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Income Taxes
9 Months Ended
Mar. 29, 2018
Income Tax Disclosure [Abstract]  
Income Taxes

Note 11 – Income Taxes

Income tax expense as a percent of pre-tax income (the “Effective Tax Rate”) for the quarter ended March 29, 2018 was 29.7% compared to an Effective Tax Rate of 31.1% for the quarter ended March 30, 2017. The Effective Tax Rate for the thirty-nine weeks ended March 29, 2018 was 33.7% compared to an Effective Tax Rate of 32.5% for the thirty-nine weeks ended March 30, 2017. The increase in the Effective Tax Rate for the thirty-nine weeks ended March 29, 2018 was primarily related to the re-measurement of our net deferred tax assets incorporating the new federal income tax rate.

H.R.1, originally known as the Tax Cuts and Jobs Act of 2017, was enacted on December 22, 2017, and includes, among other items, a reduction in the federal corporate income tax rate from 35% to 21%, which will have a material favorable impact on our effective income tax rate and cash income taxes paid going forward. Because we have a June fiscal year-end, the lower corporate income tax rate will be phased in during the 2018 calendar year, resulting in a U.S. statutory federal rate of approximately 28% for our fiscal year ending June 28, 2018, and 21% for subsequent fiscal years. Our net deferred tax asset balances are recorded at the tax rate expected to be in effect during the period in which the related temporary differences reverse. Therefore, this reduction in the corporate federal income tax rate required a non-cash reduction of our net deferred tax asset balances and a corresponding increase in income tax expense of $2,480 during the thirty-nine weeks ended March 29, 2018. We scheduled out the expected reversal of temporary differences, including anticipated changes in our pension accrual and fixed asset acquisitions for the next three months, which required the use of reasonable estimates. Actual results could differ from those estimates, and thus further adjustment of our deferred tax asset balances are possible.

Windfall tax benefits related to the excess tax deduction of share-based compensation of $512 for the thirty-nine weeks ended March 29, 2018 partially offset the impact of the reduction of the corporate tax rate.