Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s effective tax rate for the three months ended June 30, 2019 and July 1, 2018 was 29.2% and 29.3% respectively. The Company’s effective tax rate varies from the U.S. federal statutory rate of 21% primarily due to (1) state income taxes, including non-recurring changes to state deferred taxes, (2) net excess tax benefits related to share-based payments, which resulted in a benefit of $889 and $798 for the three months ended June 30, 2019 and July 1, 2018, respectively, (3) valuation allowance changes, net of federal benefit, and (4) the impact of the comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”).

The Company’s effective tax rate for the six months ended June 30, 2019 and July 1, 2018 was 24.9% and 11.6% respectively. The Company’s effective tax rate varies from the U.S. federal statutory rate of 21% primarily due to (1) net excess tax benefits related to share-based payments, which resulted in a benefit of $2,925 and $6,891 for the six months ended June 30, 2019 and July 1, 2018, respectively, (2) state income taxes, including non-recurring changes to state deferred taxes, (3) the impact of the Tax Act and (4) valuation allowance changes, net of federal benefit.

On December 22, 2017, the U.S. government enacted the Tax Act. In our continued analysis of the impact of the Tax Act in the first and second quarters of 2018 under Staff Accounting Bulletin 118, we adjusted our provisional amounts for a discrete net tax benefit of $2,795. This net benefit included $4,750 for the tax benefit of foreign tax credits, partially offset by a net expense of $1,955 related to the impact of the corporate rate reduction on our net deferred tax liabilities.

There were no significant changes to the unrecognized tax benefits or related interest and penalties for the three and six months ended June 30, 2019. During the next twelve months, we believe it is reasonably possible the Company will reduce unrecognized tax benefits by up to $7,760 due to the lapse of statutes of limitations and expected settlements with taxing authorities.

The current portion of refundable income taxes was $7,572 and $14,475 as of June 30, 2019 and December 30, 2018, respectively, and is included in “Accounts and notes receivable, net” in the condensed consolidated balance sheets. There were no long-term refundable income taxes as of June 30, 2019 and December 30, 2018.