Income Taxes

12 Months Ended

Apr. 01, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesThe provision for income taxes generally represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. The following details the provision for income taxes for fiscal years 2023, 2022 and 2021 (in thousands):

	2023		2022		2021
Current
Federal	$	51,190	$	7,271	$	16,823
State	12,709		8,768		3,128
Foreign	50		—		—
	63,949		16,039		19,951
Deferred
Federal	2,705		(1,257)		302
State	(732)		(535)		13
	1,973		(1,792)		315
	$	65,922	$	14,247	$	20,266

A reconciliation of income taxes computed by applying the expected federal statutory income tax rate of 21% for fiscal years 2023, 2022 and 2021 to income before income taxes reported in the Consolidated Statements of Comprehensive Income is as follows (in thousands):

	2023		2022		2021
Federal income tax at statutory rate	$	64,420	$	44,518	$	20,351
State income taxes, net of federal benefit	12,172		8,075		3,422
Stock-based compensation	(884)		(1,421)		(2,710)
Tax credits	(10,847)		(37,488)		(1,356)
Other	1,061		563		559
	$	65,922	$	14,247	$	20,266

Net deferred tax assets and liabilities were as follows (in thousands):

	April 1, 2023		April 2, 2022
Net deferred tax (liabilities) assets
Property, plant and equipment	$	(16,763)	$	(7,030)
Goodwill	(16,041)		(16,675)
Warranty reserves	7,355		5,913
Lease - Operating lease liability	6,323		4,270
Lease - Right of use assets	(6,050)		(3,968)
Salaries and wages	3,675		3,924
Accrued volume rebates	2,713		2,600
Research and experimentation expenditures	2,712		—
Inventory	2,151		2,192
Stock-based compensation	2,086		2,199
Loan discount	970		1,275
Unrealized gains on marketable equity investments	(5)		(1,715)
Other	3,293		1,487
	$	(7,581)	$	(5,528)

The effective income tax rate for the current year was positively impacted by the recognition of tax credits and stock option exercises. Of the total tax credits, $9.8 million related to the sale of energy efficient homes and energy start credits available under the Internal Revenue Code §45L and $1.0 million related to the Research and Development and Work Opportunity Tax Credits. The §45L tax credit was initially established under the Federal Energy Policy Act of 2005 and was extended through December 31, 2022 by the Inflation Reduction Act of 2022. The Company determined eligibility for the program in consultation with third-party qualified experts.

We recorded an insignificant amount of unrecognized tax benefits during fiscal years 2023, 2022 and 2021, and there would be an insignificant effect on the effective tax rate if all unrecognized tax benefits were recognized. We classify interest and penalties related to unrecognized tax benefits in income tax expense. The total amount of unrecognized tax benefit related to any particular tax position is not anticipated to change significantly within the next 12 months. We believe that our income tax filing positions and deductions will be sustained on audit and we do not anticipate any adjustments that will result in a material change to our financial position.

We periodically evaluate the deferred tax assets based on the requirements established in ASC 740, which requires the recording of a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The determination of the need for, or amount of, any valuation allowance involves significant management judgment and is based upon the evaluation of both positive and negative evidence, including management projections of anticipated taxable income. At April 1, 2023, we had state net operating loss carryforwards totaling $8.4 million, which begin to expire in 2036, and an associated valuation allowance of $0.3 million. We have evaluated our historical profits earned and forecasted taxable income and determined that, except as described above, all of the deferred tax assets would be utilized in future periods. Ultimate realization of the deferred tax assets depends on our ability to continue to earn profits, as we have historically, and to meet these forecasts in future periods.

Income tax returns are filed in the U.S. federal jurisdiction and in several state jurisdictions. In general, we are no longer subject to examination by the IRS or state and local income tax examinations by tax authorities for years before fiscal year 2019; however, we have filed refund claims for fiscal 2018 and 2019 which are currently being processed by the IRS.