Income Taxes (Tables)

12 Months Ended

Jan. 02, 2018

The components of the provision (benefit) for income taxes are as follows for 2017, 2016 and 2015 (in thousands):



	2017			2016			2015
Current tax provision:
Federal	$	—		$	—		$	—
State	21			134			144
Foreign	—			—			—
	21			134			144
Deferred tax (benefit) provision:
Federal	(252		)	(1,979		)	(7,169		)
State	24			2,854			(1,495		)
Foreign	—			224			(214		)
	(228		)	1,099			(8,878		)
Total (benefit) provision for income taxes	$	(207	)	$	1,233		$	(8,734	)

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation of income tax provision (benefit) that would result from applying the federal statutory rate to pre-tax income as shown in the accompanying Consolidated Statements of Operations is as follows for 2017, 2016 and 2015 (in thousands):



	2017			2016			2015
Federal income tax benefit at federal rate	$	(12,814	)	$	(23,740	)	$	(7,650	)
State income tax benefit, net of federal tax	(1,790		)	(2,975		)	(960		)
Other permanent differences	674			996			378
Foreign rate differential	(463		)	214			66
Tax credits	(808		)	(749		)	(423		)
Change in valuation allowance	(159		)	27,353			—
Tax rate change	13,632			—			—
Deferred tax asset write-off	2,618			—			—
Other items, net	(1,097		)	134			(145		)
(Benefit) provision for income taxes	$	(207	)	$	1,233		$	(8,734	)
Effective income tax rate	0.5		%	(1.8		)%	38.8		%

Schedule of Deferred Tax Assets and Liabilities

eferred income taxes arise because of the differences in the book and tax bases of certain assets and liabilities. Deferred income tax liabilities and assets consist of the following (in thousands):



	2017			2016
Deferred tax assets (liabilities):
Loss carry forwards	$	26,991		$	14,046
Deferred rent and franchise revenue	10,486			17,753
Property, equipment and intangible assets	(9,858		)	(14,130		)
Stock-based compensation	1,086			2,802
Tax credit carry forwards	3,123			2,636
Inventory smallwares	(1,774		)	(2,805		)
Other accrued expenses	4,320			5,022
Other	1,021			1,594
Total net deferred tax assets	35,395			26,918
Valuation allowance	(35,811		)	(27,353		)
Net deferred tax liabilities	$	(416	)	$	(435	)