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Income Taxes
6 Months Ended
Dec. 29, 2018
Income Tax Disclosure [Abstract]  
Income Taxes
INCOME TAXES

Effective Tax Rate

The effective tax rates for the second quarter and first 26 weeks of fiscal 2019 were 24.59% and 21.75%, respectively. The lower effective tax rate for the second quarter of fiscal 2019 is primarily due to lower tax rates enacted from the Tax Cuts and Job Act (Tax Act), the favorable impact of excess tax benefits of equity-based compensation that totaled $7.6 million, the unfavorable impact of $11.9 million attributable to finalizing accounting with regard to certain provisions of the Tax Act, and the additional U.S. federal tax burden as a result of the global intangible low taxed income (GILTI) regime, which the company is accounting for as a periodic cost. In the second quarter of fiscal 2018, lower U.S. tax rates from the Tax Act were not yet fully applicable. The effective tax rate for the second quarter of fiscal 2018 reflects the favorable impact of the excess tax benefits of equity-based compensation that totaled $14.8 million, as well as the impact of changes in tax law in various foreign jurisdictions of $8.1 million. The effective tax rate for the second quarter of fiscal 2018 of 37.11% and the first 26 weeks of fiscal 2018 of 34.71% were negatively impacted by the transition tax resulting from the Tax Act.

In accordance with SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Job Act, the company recognized the provisional impacts related to re-measurement of deferred tax assets and liabilities and the one-time transition tax in its results for the annual period ended June 30, 2018. As of the second quarter of fiscal 2019, the company has completed its accounting for all aspects of the Tax Act, with a corresponding adjustment of $15.1 million to income tax expense related to Transition Tax, and a benefit of $3.2 million attributable to realizability of certain deferred tax assets.

Uncertain Tax Positions

As of December 29, 2018, the gross amount of unrecognized tax benefit and related accrued interest was $6.6 million and $4.4 million, respectively. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of the company’s unrecognized tax positions will increase or decrease in the next twelve months. At this time, an estimate of the range of the reasonably possible change cannot be made.

Other

The determination of the company’s provision for income taxes requires judgment, the use of estimates and the interpretation and application of complex tax laws. The company’s provision for income taxes reflects a combination of income earned and taxed in the various U.S. federal and state, as well as foreign, jurisdictions. Jurisdictional tax law changes, increases or decreases in permanent differences between book and tax items, accruals or adjustments of accruals for unrecognized tax benefits or valuation allowances, and the company’s change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate.