Income Taxes

6 Months Ended

Jul. 30, 2011

Income Taxes [Abstract]

Income Taxes

10. Income Taxes

The Company and its subsidiaries are subject to United States federal income tax as well as income tax of multiple state jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for fiscal years prior to fiscal 2007. The Company is currently under IRS examination for fiscal 2009 and 2010. With respect to state and local jurisdictions, with limited exceptions, the Company and its subsidiaries are no longer subject to income tax audits for fiscal years prior to fiscal 2007.

As of July 30, 2011, the gross amount of unrecognized tax benefits was $0.9 million, all of which would affect the effective tax rate if recognized. The amount of unrecognized tax benefits, including interest and penalties, that would no longer need to be accrued due to the passage of various statutes of limitations in the next 12 months is $0.5 million. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company had approximately $0.8 million in interest and penalties related to unrecognized tax benefits accrued as of July 30, 2011 and January 29, 2011. The Company’s total liability for unrecognized tax benefits, including interest and penalties, as of July 30, 2011 and January 29, 2011, was $1.7 million.

The Company’s effective tax rate, including the impact of its equity method investment, for the twenty-six weeks ended July 30, 2011 was 23.6%, versus an effective tax rate of 37.8% for the twenty-six weeks ended July 31, 2010. The decrease in our effective tax rate over last year was driven by an increase in state net operating losses and a lower federal tax rate in the current year.