Income Taxes

3 Months Ended

Mar. 27, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

	THIRTEEN WEEKS ENDED
(dollars in thousands)	MARCH 27, 2022			MARCH 28, 2021
Income before provision for income taxes	$	93,623		$	76,391
Provision for income taxes	$	15,929		$	6,593
Effective income tax rate	17.0		%	8.6		%

The effective income tax rate for the thirteen weeks ended March 27, 2022 increased by 8.4 percentage points as compared to the thirteen weeks ended March 28, 2021. The increase was primarily due to the change in the amount and mix of forecasted pre-tax book income across the Company’s U.S. and international subsidiaries.

On December 28, 2021, the U.S. Treasury and the Internal Revenue Service released final regulations that, among other things, provide guidance on several aspects of the foreign tax credit rules. As part of the guidance issued, these regulations change longstanding foreign tax credit regulations that now make foreign taxes paid to certain countries no longer creditable in the United States. The Company expects that a portion of post-2021 foreign taxes paid will not be creditable in the United States. Furthermore, the impact of these regulations will result in the utilization of a portion of existing prior year foreign tax credit carryforwards for which the Company had previously recorded a valuation allowance. The valuation allowance related to the credits expected to be utilized will be released during 2022. The impact of non-creditable foreign taxes and the release of the valuation allowance has been considered as part of the effective income tax rate for the thirteen weeks ended March 27, 2022.

The Company has a blended federal and state statutory rate of approximately 26%. The effective income tax rates for the thirteen weeks ended March 27, 2022 and March 28, 2021 were lower than the statutory rate primarily due to the benefit of FICA tax credits on certain employees’ tips.