INCOME TAXES

9 Months Ended

Jul. 02, 2021

INCOME TAXES

INCOME TAXES

NOTE 9—INCOME TAXES

The provision for income taxes during each of the three and nine months ended July 2, 2021 and June 26, 2020 follows:

	Three Months Ended				Nine Months Ended
	July 2,		June 26,		July 2,		June 26,
Income Taxes	2021		2020		2021		2020
(in thousands)
Provision for income taxes	$	265	$	550	$	121	$	1,253

The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made.

In response to the COVID-19 pandemic, many governments enacted measures to provide aid and economic stimulus. These measures include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., the Consolidated Appropriations Act, 2021 (the “Consolidated Appropriations Act”), which was enacted on December 21, 2020 in the U.S., and the American Rescue Plan Act of 2021 (the “American Rescue Plan”), which was enacted on March 11, 2021 in the U.S., include measures to assist companies, including temporary changes to income and non-income-based tax laws. The Company has assessed the provisions of the CARES Act, the Consolidated Appropriations Act, and the American Rescue Plan, and has determined that there were no material tax impacts to the condensed consolidated financial statements for the three and nine months ended July 2, 2021.

The Company’s effective tax rate for the three and nine months ended July 2, 2021 is comprised of the federal tax rate of 21% plus the state tax rate of 1.58%, which is adjusted for permanent book tax differences. During the three and nine months ended July 2, 2021, the permanent items included meals and entertainment and stock based compensation. The discrete tax benefit for the three and nine months ended July 2, 2021 and June 26, 2020 is related to excess tax benefits recognized upon vesting of restricted stock units or exercise of stock options during those quarters.