Income Taxes

12 Months Ended

Sep. 24, 2022

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

For federal income tax purposes, as well as for state income tax purposes in the majority of the states in which the Partnership operates, the earnings attributable to the Partnership and the Operating Partnership are not subject to income tax at the partnership level. With the exception of those states that impose an entity-level income tax on partnerships, the taxable income or loss attributable to the Partnership and to the Operating Partnership, which may vary substantially from the income (loss) before income taxes reported by the Partnership in the consolidated statement of operations, are includable in the federal and state income tax returns of the Common Unitholders. The aggregate difference in the basis of the Partnership’s net assets for financial and tax reporting purposes cannot be readily determined as the Partnership does not have access to each Common Unitholder’s basis in the Partnership.

As described in Note 1, “Partnership Organization and Formation,” the earnings of the Corporate Entities are subject to U.S. corporate level income tax. However, based upon past performance, the Corporate Entities are currently reporting an income tax provision composed primarily of minimum state income taxes. A full valuation allowance has been provided against the deferred tax assets (with the exception of certain net operating loss carryforwards (“NOLs”) that arose after 2017) based upon an analysis of all available evidence, both negative and positive at the balance sheet date, which, taken as a whole, indicates that it is more likely than not that sufficient future taxable income will not be available to utilize the assets. Management’s periodic reviews include, among other things, the nature and amount of the taxable income and expense items, the expected timing of when assets will be used or liabilities will be required to be reported and the reliability of historical profitability of businesses expected to provide future earnings. Furthermore, management considered tax-planning strategies it could use to increase the likelihood that the deferred tax assets will be realized.

As a result of the Tax Cuts and Jobs Act of 2017, NOLs generated by the Corporate Entities beginning in 2018 may be carried forward indefinitely. As a result, the Partnership reversed the valuation allowance on certain of these NOLs generated after the 2017 Act, which resulted in a $496 discrete deferred tax benefit recorded during the first quarter of fiscal 2020. The Corporate Entities generated a taxable loss during the 2021 tax year, which resulted in a $638 discrete deferred tax benefit recorded during the first quarter of fiscal 2022.

The income tax provision of all the legal entities included in the Partnership’s consolidated statement of operations, which is composed primarily of state income taxes in the few states that impose taxes on partnerships and minimum state income taxes on the Corporate Entities, consists of the following:

	Year Ended
	September 24,			September 25,		September 26,
	2022			2021		2020
Current
Federal	$	10		$	7	$	4
State and local		1,057			1,001		346
		1,067			1,008		350
Deferred		(638	)		102		(496	)
	$	429		$	1,110	$	(146	)

The provision for income taxes differs from income taxes computed at the U.S. federal statutory rate as a result of the following:

	Year Ended
	September 24,			September 25,			September 26,
	2022			2021			2020
Income tax provision at federal statutory tax rate	$	29,429		$	26,020		$	12,728
Impact of Partnership income not subject to    federal income taxes		(30,851	)		(26,444	)		(13,045	)
Permanent differences		131			174			127
Change in valuation allowance		1,174			570			(298	)
State income taxes		717			929			403
Other		(171	)		(139	)		(61	)
Provision for income taxes - current and deferred	$	429		$	1,110		$	(146	)

The components of net deferred taxes and the related valuation allowance using currently enacted tax rates are as follows:

	Year Ended
	September 24,			September 25,
	2022			2021
Deferred tax assets:
Net operating loss carryforwards	$	39,355		$	37,806
Allowance for doubtful accounts		368			208
Inventory		418			264
Deferred revenue		526			557
Other accruals		2,391			2,671
Total deferred tax assets		43,058			41,506
Deferred tax liabilities:
Intangible assets		1,191			1,189
Property, plant and equipment		1,393			1,655
Total deferred tax liabilities		2,584			2,844
Net deferred tax assets		40,474			38,662
Valuation allowance		(39,442	)		(38,268	)
Net deferred tax assets	$	1,032		$	394