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Income Taxes Income Taxes (Notes)
9 Months Ended
Jan. 26, 2019
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
Note 13. Income Taxes
We recorded an income tax benefit of $(294) on a pre-tax income of $475 during the 13 weeks ended January 26, 2019, which represented an effective income tax rate of (61.9)% and an income tax benefit of $(15,344) on pre-tax loss of $(298,579) during the 13 weeks ended January 27, 2018, which represented an effective income tax rate of 5.1%.
We recorded income tax expense of $2,680 on pre-tax income of $24,524 during the 39 weeks ended January 26, 2019, which represented an effective income tax rate of 10.9% and an income tax benefit of $(6,113) on pre-tax loss of $(275,736) during the 39 weeks ended January 27, 2018, which represented an effective income tax rate of 2.2%
The effective tax rate for the 13 weeks ended January 26, 2019 is significantly lower as compared to the comparable prior year period due to the reduced federal tax rate because of U.S Tax Reform and the inclusion in the comparable prior year period of an income tax benefit of revaluing deferred tax liabilities, partially offset by permanent differences which relate to the nondeductible portion of the prior year goodwill impairment (see Note 2. Summary of Significant Accounting Policies). The effective tax rate for the 39 weeks ended January 26, 2019 is significantly higher as compared to the comparable prior year period due to the income tax benefit of revaluing deferred tax liabilities recorded in the prior year period and permanent differences, partially offset by the reduced federal tax rate because of U.S. Tax Reform.
Impact of U.S. Tax Reform
The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017. The Act reduces the U.S. federal corporate tax rate from 35% to 21% and requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, among other provisions. In accordance with SAB 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act” (SAB 118), during the quarter ended January 27, 2018, we recognized the reasonable estimated effects on our existing deferred tax balances and one-time transition tax. During the quarter ended January 26, 2019, we finalized the accounting for the enactment of the Act. The most significant impact of the legislation for the Company was a $20,425 reduction of the value of our net deferred (which represents future tax liabilities) and long-term tax liabilities as a result of lowering the U.S. corporate income tax rate from 35% to 21%, which was recorded in Fiscal 2018. During the second quarter of Fiscal 2019, we recorded an additional measurement period adjustment to further reduce our net deferred tax liability by $3,815 as a result of accelerating certain deductions as permitted by the U.S. tax code. During the third quarter of Fiscal 2019, we filed our tax return for the tax year ending January 27, 2018 and finalized the accounting for the enactment of the Act by recording an additional $96 reduction to our net deferred tax liability. This measurement period adjustment reduced the Company's effective tax rate by 20.2% and 15.9% during the 13 and 39 weeks ended January 26, 2019, respectively. We also recorded a liability associated with the one-time transition tax. This amount is not material.