Income Taxes

12 Months Ended

Jan. 29, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of the provision (benefit) for income taxes were as follows (dollars in thousands):

	Fiscal Year Ended
	January 29, 2022		January 30, 2021		January 25, 2020
Current:
Federal	$	(3,323)	$	42,794	$	8,389
Foreign	(4)		(2)		(56)
State	(495)		10,273		3,727
	(3,822)		53,065		12,060
Deferred:
Federal	7,506		(24,380)		7,257
Foreign	—		—		568
State	518		(3,805)		1,436
	8,024		(28,185)		9,261
Provision for income taxes	$	4,202	$	24,880	$	21,321

Our effective income tax rate differs from the statutory rate primarily due to the difference in income tax rates from state to state where work was performed, non-deductible and non-taxable items, tax credits recognized, tax effects from the vesting and exercise of share-based awards, and changes in unrecognized tax benefits. Fiscal 2022 includes approximately $5.0 million for incremental tax benefits for credits related to tax filings for prior periods. During fiscal 2021 our effective tax rate was impacted by a $53.3 million goodwill impairment charge which was mostly non-deductible for income tax purposes, and the benefit from a $2.6 million tax loss carryback technical correction under the CARES Act.

	Fiscal Year Ended
	January 29, 2022		January 30, 2021		January 25, 2020
Statutory rate applied to pre-tax income	$	11,083	$	12,436	$	16,495
State taxes, net of federal tax benefit	1,422		4,344		4,282
Change in accruals for uncertain tax positions	4,493		1,189		891
Compensation limitation	1,468		2,632		82
Tax filings for prior periods	(4,609)		—		—
Tax credits	(3,756)		(3,145)		(2,801)
Federal (benefit) deficiency of vesting and exercise of share-based awards	(2,425)		(436)		875
Deferred tax remeasurements	(1,355)		—		—
Effect of rates other than statutory	71		(4)		(197)
Non-deductible and non-taxable items, net	70		808		1,351
Change in valuation allowance	(12)		1		722
Non-deductible goodwill impairment	—		10,411		—
Tax Reform and related effects	—		(2,631)		1,093
Other items, net	(2,248)		(725)		(1,472)
Provision for income taxes	$	4,202	$	24,880	$	21,321

Deferred Income Taxes

The deferred tax provision represents the change in the deferred tax assets and the liabilities representing the tax consequences of changes in the amount of temporary differences and changes in tax rates during the year. The significant components of deferred tax assets and liabilities consisted of the following (dollars in thousands):

	January 29, 2022		January 30, 2021
Deferred tax assets:
Insurance and other reserves	$	19,407	$	23,513
Leases	15,718		16,119
CARES Act tax deferral	4,791		9,588
Stock-based compensation	2,303		3,198
Allowance for doubtful accounts and reserves	1,356		1,615
Net operating loss carryforwards	9,183		1,401
Other	6,233		3,238
Total deferred tax assets	58,991		58,672
Valuation allowance	(1,131)		(1,139)
Deferred tax assets, net of valuation allowance	$	57,860	$	57,533
Deferred tax liabilities:
Property and equipment	$	63,310	$	57,287
Goodwill and intangibles	33,221		30,395
Leases	15,822		16,310
Other	1,181		1,191
Deferred tax liabilities	$	113,534	$	105,183
Net deferred tax liabilities	$	55,674	$	47,650

The valuation allowance above reduces the deferred tax asset balances to the amount that we have determined is more likely than not to be realized. The valuation allowance primarily relates to immaterial foreign net operating loss carryforwards and immaterial state net operating loss carryforwards, which generally begin to expire in fiscal 2023.

Uncertain Tax Positions

As of January 29, 2022 and January 30, 2021, we had total unrecognized tax benefits of $11.9 million and $5.9 million, respectively, resulting from uncertain tax positions. Our effective tax rate will be reduced by $10.5 million during future periods if it is determined these unrecognized tax benefits are realizable. We had approximately $2.3 million and $1.9 million accrued for the payment of interest and penalties as of January 29, 2022 and January 30, 2021, respectively. Interest expense related to unrecognized tax benefits for the Company was not material during fiscal 2022, fiscal 2021, and fiscal 2020.

A summary of unrecognized tax benefits is as follows (dollars in thousands):

	Fiscal Year Ended
	January 29, 2022		January 30, 2021		January 25, 2020
Balance at beginning of year	$	5,940	$	4,742	$	3,786
Additions based on tax positions related to the fiscal year	1,377		1,075		696
Additions based on tax positions related to prior years	4,612		530		358
Reductions related to the expiration of statutes of limitation	—		(407)		(98)
Balance at end of year	$	11,929	$	5,940	$	4,742