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Income taxes
12 Months Ended
Apr. 02, 2022
Income taxes  
Income taxes

6. Income taxes

Components of the provision for income taxes are as follows:

Fiscal Year Ended

 

April 2,

April 3,

March 28,

 

    

2022

    

2021

    

2020

 

Income before income taxes:

U.S.

$

98,389

$

61,703

$

12,168

Foreign

 

14,305

 

19,140

 

9,034

$

112,694

$

80,843

$

21,202

Current

Federal

$

18,510

$

17,727

$

2,953

State

 

6,194

 

5,738

 

1,646

Foreign

 

2,651

 

3,835

 

1,968

Total current provision

 

27,355

 

27,300

 

6,567

Deferred

Federal

 

2,998

 

(3,733)

 

448

State

 

326

 

(1,029)

 

(302)

Foreign

 

297

 

22

 

2

Total deferred provision (benefit)

 

3,621

 

(4,740)

 

148

Total provision for income taxes

$

30,976

$

22,560

$

6,715

Effective income tax rate reconciliation

Differences between the actual provision for income taxes and the amounts computed by applying the statutory federal tax rate to income before taxes are as follows:

Fiscal Year Ended

April 2,

April 3,

March 28,

    

2022

    

2021

    

2020

Provision computed at federal statutory rate

$

23,666

$

16,977

$

4,453

Permanent differences

 

1,460

 

1,326

 

1,145

One-time transition tax, net

 

 

 

Change in valuation allowance

 

80

 

(25)

 

(46)

State income taxes, net of federal benefit

 

5,189

 

3,720

 

1,062

Effect of foreign income taxes

 

(75)

 

7

 

(8)

Remeasurement of deferred tax balances

 

 

 

Other, net

 

656

 

555

 

109

$

30,976

$

22,560

$

6,715

Deferred taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Components of deferred tax assets and liabilities as of April 2, 2022 and April 3, 2021, are as follows:

April 2,

April 3,

 

    

2022

    

2021

 

Deferred tax assets:

Inventory

$

2,257

$

1,560

Loss and credit carryforwards

 

5,474

 

4,519

Stock-based compensation

 

4,701

 

5,579

Accrued liabilities

 

6,006

 

5,786

Operating lease liabilities

94,811

86,635

Capital assets

94

106

 

113,343

 

104,185

Valuation allowance

 

(4,991)

 

(3,565)

Total deferred tax assets

 

108,352

 

100,620

Deferred tax liabilities:

Intangibles

 

(57,269)

 

(57,789)

Operating lease assets

(87,092)

(77,039)

Capital assets

 

(12,908)

 

(10,375)

Other

 

(711)

 

(2,035)

Total deferred tax liabilities

 

(157,980)

 

(147,238)

Net deferred tax liabilities

$

(49,628)

$

(46,618)

The Company has recorded deferred tax assets and liabilities based upon estimates of their realizable value with such estimates based upon likely future tax consequences. In assessing the need for a valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets. If, based on the weight of available evidence, it is more-likely-than-not that a deferred tax asset will not be realized, the Company records a valuation allowance.

Foreign and domestic tax credits, net of valuation allowances, totaled approximately $551 at April 2, 2022 and approximately $779 at April 3, 2021. The various credits available at April 2, 2022 expire in the 2026 tax year.

The Company had deferred tax assets for foreign and state net operating loss carryovers of $2,231 at April 2, 2022, and approximately $2,408 at April 3, 2021. Valuation allowances of $2,051 and $2,223 were recorded against the net operating loss deferred tax assets at April 2, 2022 and April 3, 2021, respectively.

The Company files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. The Company is currently subject to U.S. federal income tax examinations for the year ended March 30, 2019 and forward. With respect to state and local jurisdictions and countries outside of the United States, the Company and subsidiaries are typically subject to examination for three to six years after the income tax returns have been filed.

We operate in certain jurisdictions outside the United States. ASC 740-30 provides that the undistributed earnings of a foreign subsidiary be accounted for as a temporary difference under the presumption that all undistributed earnings will be distributed to the parent company as a dividend. Sufficient evidence of the intent to permanently reinvest the earnings in the jurisdiction where earned precludes a company from recording the temporary difference. For purposes of ASC 740-30, the Company does not consider the earnings subject to the transition tax and GILTI under the Tax Act permanently reinvested.  All other earnings are considered permanently reinvested.