Income Taxes

9 Months Ended

May 06, 2012

Income Taxes

Note 7—Income Taxes

The Company’s reported effective income tax rates for the thirty-six weeks ended May 6, 2012, and May 8, 2011, were 36.4%, and 35.3%, respectively, in the accompanying condensed consolidated statements of income, which includes the net impact of discrete items. The Company’s current year consolidated provision for income taxes was adversely impacted by a net discrete tax expense of $23 relating primarily to two items: the adverse impact of an audit of Costco Mexico by the Mexican tax authority and the tax effects of nondeductible expenses for the Company’s contribution to an initiative reforming alcohol beverage laws in Washington State.