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Income Taxes
 12 Months Ended
Feb. 03, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The provision for income taxes was comprised of the following:
(In thousands)202320222021
Current:
U.S. Federal$(5,757)$(1,862)$26,888 
U.S. State and local(1,235)(1,105)8,138 
Total current tax (benefit) expense(6,992)(2,967)35,026 
Deferred:
U.S. Federal35,925 (57,054)13,651 
U.S. State and local20,835 (9,688)5,356 
Total deferred tax expense (benefit)56,760 (66,742)19,007 
Income tax provision (a)
$49,768 $(69,709)$54,033 
(a) The income tax provision for 2023 is not directly comparable to the income tax provision for 2021 and 2022 due to the valuation allowance recorded on our deferred tax assets in 2023 due to a triggering event that resulted from a three-year cumulative loss before income taxes.

Reconciliation between the statutory federal income tax rate and the effective income tax rate was as follows:
202320222021
Statutory federal income tax rate21.0 %21.0 %21.0 %
Effect of:
State and local income taxes, net of federal tax benefit3.7 3.0 4.6 
Work opportunity tax and other employment tax credits0.5 1.0 (1.4)
Executive compensation limitations - permanent difference(0.2)(0.3)1.8 
Share-based compensation (0.3)(0.2)(2.3)
Change in valuation allowance(36.4)— — 
Other, net0.2 0.4 (0.4)
Effective income tax rate (a)
(11.5)%24.9 %23.3 %
(a) The reconciliation between the statutory federal income tax rate and effective income tax rate for 2023 and 2022 are not directly comparable to the reconciliation for 2021 due to the loss before income taxes in 2023 and 2022 compared to the income before income taxes in 2021. Further, the reconciliation between the statutory federal income tax rate and the effective income tax rate for 2023 is not directly comparable to the reconciliations for 2021 and 2022 due to the valuation allowance recorded on our deferred tax assets in 2023.

Income tax payments and refunds were as follows:
(In thousands)202320222021
Income taxes refunded$(11,656)$(27,759)$(546)
Income taxes paid1,370 4,318 111,206 
Net income taxes (refunded) paid$(10,286)$(23,441)$110,660 
Deferred taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax, including income tax uncertainties. Significant components of our deferred tax assets and liabilities were as follows:
(In thousands)February 3, 2024January 28, 2023
Deferred tax assets:
Lease liabilities, net of lease incentives$482,272 $458,293 
Net operating losses, tax credits, and other carryforwards107,313 64,513 
Sale and leaseback financing liability31,332 32,251 
Uniform inventory capitalization22,723 23,660 
Workers’ compensation and other insurance reserves20,715 20,868 
Depreciation and fixed asset basis differences10,869 39,218 
Compensation related8,397 5,376 
Research and development costs capitalized for tax3,618 171 
Accrued state taxes1,506 1,581 
Accrued operating liabilities1,166 3,032 
Other19,226 15,903 
Valuation allowances, net of federal tax benefit(159,178)(2,102)
Total deferred tax assets549,959 662,764 
Deferred tax liabilities:
Right-of-use assets, net of amortization417,965 409,979 
Accelerated depreciation and fixed asset basis differences83,738 113,469 
Deferred gain on like-kind exchange13,927 13,930 
Lease construction reimbursements11,261 11,368 
Prepaid expenses5,506 5,548 
Workers’ compensation and other insurance reserves3,905 4,067 
Synthetic lease obligation— 38,464 
Other14,116 9,638 
Total deferred tax liabilities550,418 606,463 
Net deferred tax assets (liabilities)$(459)$56,301 

Our deferred tax assets and deferred tax liabilities, netted by tax jurisdiction, are summarized in the table below:
(In thousands)February 3, 2024January 28, 2023
U.S. Federal$(285)$35,640 
U.S. State and local(174)20,661 
Net deferred tax assets (liabilities)$(459)$56,301 


The following table summarizes changes in the valuation allowance:
(In thousands)202320222021
Valuation allowance - beginning of year$2,102 $2,093 $2,105 
Additions charged to income tax benefit159,207 9 — 
Allowances taken or written off(2,131)— (12)
Other adjustments— — — 
Valuation allowance - end of year$159,178 $2,102 $2,093 

The increase in the valuation allowance during 2023 is primarily related to the valuation allowance recorded on our deferred tax assets in 2023 due to a triggering event that resulted from a three-year cumulative loss before income taxes.
We have the following income tax loss and credit carryforwards at February 3, 2024 (amounts are shown net of tax excluding the federal income tax effect of the state and local items):
(In thousands)
U.S. Federal:
Federal net operating loss carryforward$73,631 Indefinite carryforward
Other carryforwards18,191 Predominately indefinite carryforward
Employment tax credits2,791 Expires 2045
Total U.S. Federal94,613 
U.S. State and local:
State and local net operating loss carryforwards19,234 Various carryforward periods ranging from 5 to 20 years including some jurisdictions with no expirations
Other state credits661 Expires fiscal years through 2026
Total U.S. State and local19,895 
Total net operating losses, tax credits, and other carryforwards$114,508 

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits for 2023, 2022, and 2021:
(In thousands)202320222021
Unrecognized tax benefits - beginning of year$7,533 $9,862 $9,465 
Gross increases - tax positions in current year32 357 410 
Gross increases - tax positions in prior period1,112 424 1,864 
Gross decreases - tax positions in prior period— (1,555)(1,039)
Settlements— (333)(125)
Lapse of statute of limitations(1,231)(1,222)(713)
Unrecognized tax benefits - end of year$7,446 $7,533 $9,862 

At the end of 2023 and 2022, the total amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate is $3.5 million and $4.9 million, respectively, after considering the federal tax benefit of state and local income taxes of $0.9 million and $1.1 million, respectively. Unrecognized tax benefits of $2.7 million and $1.6 million in 2023 and 2022, respectively, relate to tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The uncertain timing items could result in the acceleration of the payment of cash to the taxing authority to an earlier period.

We recognized an expense (benefit) associated with interest and penalties on unrecognized tax benefits of approximately $0.3 million, $(0.8) million, and $(1.1) million during 2023, 2022, and 2021, respectively, as a component of income tax expense. The amount of accrued interest and penalties recognized in the accompanying consolidated balance sheets at February 3, 2024 and January 28, 2023 was $2.1 million and $1.8 million, respectively.


We are subject to U.S. federal income tax, and income tax of multiple state and local jurisdictions. The statute of limitations for assessments on our federal income tax returns for periods prior to 2020 has lapsed. In addition, the state income tax returns filed by us are subject to examination generally for periods beginning with 2018, although state income tax carryforward attributes generated prior to 2018 and non-filing positions may still be adjusted upon examination. We have various state returns in the process of examination or administrative appeal.

We have estimated the reasonably possible expected net change in unrecognized tax benefits through February 3, 2024, based on expected cash and noncash settlements or payments of uncertain tax positions and lapses of the applicable statutes of limitations for unrecognized tax benefits. The estimated net decrease in unrecognized tax benefits for the next 12 months is approximately $2.0 million. Actual results may differ materially from this estimate.