7.	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 and Note 2, the earnings of the Corporate Entities are subject to corporate level federal and state 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 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.

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 30,		September 24,		September 26,
	2017		2016		2015
Current
Federal	$	13	$	7	$	23
State and local		446		581		677
		459		588		700
Deferred		—		—		—
	$	459	$	588	$	700

The provision for income taxes differs from income taxes computed at the United States federal statutory rate as a result of the following:

	Year Ended
	September 30,			September 24,			September 26,
	2017			2016			2015
Income tax provision at federal statutory tax rate	$	13,459		$	5,260		$	29,768
Impact of Partnership income not subject to federal income taxes		(13,892	)		(9,844	)		(32,148	)
Permanent differences		3			182			210
Change in valuation allowance		406			4,737			2,181
State income taxes		864			(211	)		253
Other		(381	)		464			436
Provision for income taxes - current	$	459		$	588		$	700

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

	Year Ended
	September 30,			September 24,
	2017			2016
Deferred tax assets:
Net operating loss carryforwards	$	59,731		$	60,628
Allowance for doubtful accounts		315			184
Inventory		572			457
Deferred revenue		1,041			1,091
AMT credit carryforward		1,086			1,086
Other accruals		1,883			1,179
Total deferred tax assets		64,628			64,625
Deferred tax liabilities:
Intangible assets		1,223			775
Property, plant and equipment		4,217			5,068
Total deferred tax liabilities		5,440			5,843
Net deferred tax assets		59,188			58,782
Valuation allowance		(59,188	)		(58,782	)
Net deferred tax assets	$	—		$	—