Income Taxes

12 Months Ended

Jan. 28, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of income tax expense (benefit) for fiscal years 2022, 2021 and 2020 were as follows (in thousands):

	Fiscal Year Ended
	January 28, 2023		January 29, 2022		January 30, 2021
Current:
Federal	$	(8)	$	16,147	$	2,279
State	622		6,094		1,284
	614		22,241		3,563
Deferred:
Federal	2,308		709		(3,889)
State	568		(198)		(988)
	2,876		511		(4,877)
Total income tax expense (benefit)	$	3,490	$	22,752	$	(1,314)

A reconciliation of income tax expense (benefit) to the amount computed at the federal statutory rate for fiscal years 2022, 2021 and 2020 is as follows (in thousands):

	Fiscal Year Ended
	January 28, 2023		January 29, 2022		January 30, 2021
Federal taxes at statutory rate	$	2,764	$	18,270	$	(516)
State and local income taxes, net of federal benefit	754		4,480		(132)
Nondeductible executive compensation	100		660		—
Share-based compensation discrete items (1)	101		(828)		53
Tax credits	(231)		(137)		(166)
Enhanced contribution deduction	(147)		(92)		(77)
Return to provision adjustments	220		208		(582)
Other	(71)		191		106
Total income tax expense (benefit)	$	3,490	$	22,752	$	(1,314)

(1)This amount includes the impact of discrete items related to the expiration of stock options, exercises of stock options and the settlement of restricted stock that are recorded to income tax expense which represents share-based compensation cost previously recognized by us that was greater than the deduction allowed for income tax purposes based on the price of our common stock on the date of expiration, exercise or vesting.

Deferred income taxes reflect the net tax effects of: (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes; and (b) operating loss and tax credit carry-forwards. We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations.

Significant components of deferred tax assets and liabilities as of January 28, 2023 and January 29, 2022 were as follows (in thousands):

	January 28, 2023		January 29, 2022
Deferred tax assets:
Lease liability	$	63,562	$	64,754
Compensation and benefits	635		2,829
Inventories	2,120		2,056
Accrued expenses	1,307		1,807
Share-based compensation	984		727
Deferred revenue	1,530		640
Other	848		570
Total deferred tax assets	70,986		73,383
Deferred tax liabilities:
Lease asset	(54,200)		(54,991)
Property and equipment	(7,014)		(5,746)
Prepaid expenses	(1,202)		(1,200)
Marketable securities	(73)		—
Total deferred tax liabilities	(62,489)		(61,937)
Net deferred tax asset	$	8,497	$	11,446

As of January 28, 2023 and January 29, 2022, there were no material federal and state net operating losses or tax credits carried forward.

Uncertain Tax Positions

As of January 28, 2023 and January 29, 2022, there were no material unrecognized tax positions. We do not anticipate that there will be a material change in the balance of the unrecognized tax positions in the next 12 months. Any interest and penalties related to uncertain tax positions are recorded in income tax expense. We did not recognize any interest or penalties related to unrecognized tax positions during fiscal years 2022, 2021 and 2020.

We file income tax returns in the United States federal jurisdiction and in various state and local jurisdictions. In the normal course of business, we are subject to examination by taxing authorities. Fiscal years 2019 through 2021 remain subject to examination for federal tax purposes and fiscal years 2018 through 2021 remain subject to examination in significant state tax jurisdictions.