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INCOME TAXES (Tables)

12 Months Ended

Dec. 27, 2020

The provision for income taxes is comprised of the following:



(in thousands)	2020		2019		2018
Current taxes:
Federal	$	(7,318)	$	(933)	$	5,088
State	(382)		3,835		5,208
Foreign	3,045		2,806		1,542
Total current taxes	(4,655)		5,708		11,838
Deferred taxes:
Federal	(22,416)		846		(1,283)
State	(3,369)		1,216		120
Foreign	(981)		(799)		(766)
Total deferred taxes	(26,766)		1,263		(1,929)
Provision for income taxes	$	(31,421)	$	6,971	$	9,909

Schedule of Effective Income Tax Rate Reconciliation

The items accounting for the difference between income taxes computed at the statutory federal income tax rate and income taxes reported on the Consolidated Statements of Operations and Comprehensive Income are as follows:



(in thousands, except percentages)	2020		%		2019		%		2018		%
Income tax expense (benefit) based on statutory rate	$	(36,385)	21.0	%	$	14,709	21.0	%	$	15,889	21.0	%
Increase (decrease) resulting from:
State income taxes, net of federal benefit	(6,631)		3.8		3,666		5.3		3,826		5.1
Job and other tax credits, net	(7,719)		4.5		(13,627)		(19.4)		(12,303)		(16.3)
Benefit from the CARES Act	(2,939)		1.7		—		—		—		—

Non-deductible goodwill impairment charge	21,849		(12.6)		—		—		—		—
Non-deductible/non-taxable items	124		(0.1)		1,559		2.2		1,191		1.6
Foreign taxes	(977)		0.5		282		0.4		735		1.0
Other, net	1,257		(0.7)		382		0.5		571		0.7
Total tax expense (benefit)	$	(31,421)	18.1	%	$	6,971	10.0	%	$	9,909	13.1	%

Schedule of Components of Income Before Income Tax

U.S. and international components of income before tax expense was as follows:



(in thousands)	2020		2019		2018
U.S.	$	(148,492)	$	61,610	$	73,051
International	(24,770)		8,434		2,612
Income (loss) before tax expense (benefit)	$	(173,262)	$	70,044	$	75,663

Schedule of Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities were as follows:


(in thousands)	December 27, 2020		December 29, 2019
Deferred tax assets:
Allowance for doubtful accounts	$	991	$	973
Workers’ compensation	—		817
Accounts payable and other accrued expenses	7,933		3,818
Net operating loss carryforwards	3,679		2,085
Tax credit carryforwards	18,461		9,528
Accrued wages and benefits	7,938		5,148

Deferred compensation	10,130		6,622
Lease liabilities	21,771		8,670
Other	1,047		969
Total	71,950		38,630
Valuation allowance	(3,072)		(1,780)
Total deferred tax asset, net of valuation allowance	68,878		36,850
Deferred tax liabilities:
Prepaid expenses, deposits and other current assets	(1,840)		(1,282)
Lease right-of-use assets	(20,692)		(7,985)
Depreciation and amortization	(13,274)		(24,355)
Workers’ compensation	(3,053)		—

Total deferred tax liabilities	(38,859)		(33,622)
Deferred income taxes, net	$	30,019	$	3,228

Income Tax Valuation Allowance

The activity related to the income tax valuation allowance was as follows:


(in thousands)	2020		2019		2018
Beginning balance	$	1,780	$	2,079	$	2,508

Charged to expense	1,292		—		—

Release of allowance	—		(299)		(429)
Ending balance	$	3,072	$	1,780	$	2,079

Summary of Tax Credit Carryforwards

The following table summarizes our NOLs and credit carryforwards along with their respective valuation allowance as of December 27, 2020:


(in thousands)	Carryover tax benefit		Valuation allowance		Expected benefit		Year expiration begins
Year-end tax attributes:
Federal WOTCs	$	17,049	$	—	$	17,049	2039
State NOLs	2,949		(931)		2,018		Various
Foreign NOLs	730		(730)		—		Various
California Enterprise Zone credits	1,411		(1,411)		—		2023
Foreign alternative minimum tax credits	1,103		—		1,103		2028
Total	$	23,242	$	(3,072)	$	20,170

Schedule of Unrecognized Tax Benefits

The following table summarizes the activity related to our unrecognized tax benefits:


(in thousands)	2020		2019		2018
Beginning balance	$	2,078	$	2,190	$	2,210
Increases for tax positions related to the current year	218		318		377


Reductions due to lapsed statute of limitations	(366)		(430)		(397)
Ending balance	$	1,930	$	2,078	$	2,190