The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. Under ASC Topic 740, deferred tax assets and liabilities are recognized based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The accounting regulation requires current recognition of net deferred tax assets to the extent it is more likely than not such net assets will be realized. To the extent that the Company believes its net deferred tax assets will not be realized, a valuation allowance must be recorded against those assets.

At the end of fiscal 2013, the Company entered a three-year cumulative loss and based on all positive and negative evidence at February 1, 2014, the Company established a full valuation allowance against its net deferred tax assets. While the Company has projected it will return to profitability, generate taxable income and ultimately emerge from a three-year cumulative loss, based on operating results for fiscal 2019 and the Company’s forecast for fiscal 2020, the Company believes that a full allowance remains appropriate at this time. Realization of the Company’s deferred tax assets is dependent on generating sufficient taxable income in the near term.

As of February 1, 2020, for federal income tax purposes, the Company has net operating loss carryforwards of $141.5 million, which will expire from fiscal 2022 through fiscal 2036 and net operating loss carryforwards of $24.3 million that are not subject to expiration. For state income tax purposes, the Company has $93.5 million of net operating losses that are available to offset future taxable income, the majority of which will expire from fiscal 2020 through fiscal 2039. Additionally, the Company has $3.1 million of net operating loss carryforwards related to the Company’s operations in Canada, which will expire from fiscal 2025 through fiscal 2039.

The utilization of net operating loss carryforwards and the realization of tax benefits in future years depends predominantly upon having taxable income. Under the provisions of the Internal Revenue Code, certain substantial changes in the Company’s ownership may result in a limitation on the amount of net operating loss carryforwards and tax credit carryforwards, which may be used in future years.

In fiscal 2017, as part of the 2017 Tax Act, the corporate alternative minimum tax (“AMT”) was repealed and the Company’s AMT credit of $2.1 million, net of the applicable sequestration rate, became refundable. Accordingly, in fiscal 2017, the Company reversed its valuation allowance against the AMT credit, recognized an income tax benefit for $2.1 million and established a receivable of $2.1 million, which will be realized over the next four fiscal years. Late in fiscal 2018, the IRS issued an announcement that federal sequestration rules would not apply to certain AMT refunds, accordingly, the Company recognized an additional income tax benefit of $0.2 million in fiscal 2018. At February 1, 2020, the balance of the AMT receivable is $1.1 million.

In fiscal 2017, the Company reclassified approximately $2.1 million to accumulated deficit from accumulated other comprehensive income (loss) due to intraperiod tax allocations. Approximately $1.4 million of this pertained to years prior to fiscal 2017.

The components of the net deferred tax assets as of February 1, 2020 and February 2, 2019 were as follows (in thousands):

	February 1, 2020			February 2, 2019
Deferred tax assets, net:
Net operating loss carryforward	$	40,921		$	39,804
Gain on sale-leaseback		—			2,657
Accrued expenses and other		1,630			2,813
Operating lease liabilities		57,419			1,598
Goodwill and intangibles		236			510
Unrecognized loss on pension and pension expense		2,156			1,897
Inventory reserves		960			1,414
Foreign tax credit carryforward		486			766
Federal wage tax credit carryforward		824			824
Unrecognized loss on foreign exchange		—			186
State tax credits		147			147
Operating lease right-of-use assets		(48,018	)		—
Property and equipment		(9,205	)		(4,073	)
Subtotal	$	47,556		$	48,543
Valuation allowance		(47,556	)		(48,543	)
Net deferred tax assets	$	—		$	—

For fiscal 2019, the Company had total deferred tax assets of $104.8 million, total deferred tax liabilities of $57.2 million and a valuation allowance of $47.6 million.

	FISCAL YEARS ENDED
	February 1, 2020		February 2, 2019			February 3, 2018
(in thousands)
Current:
Federal	$	—	$	(151	)	$	—
State		97		93		$	(109	)
Foreign		8		8			(100	)
		105		(50	)		(209	)
Deferred:
Federal		—		—			(2,339	)
State		—		—			(24	)
Foreign		—		—			—
		—		—			(2,363	)
Total provision (benefit)	$	105	$	(50	)	$	(2,572	)

The following is a reconciliation between the statutory and effective income tax rates in dollars for the provision (benefit) for income tax:

	FISCAL YEARS ENDED
	February 1, 2020			February 2, 2019			February 3, 2018

(in thousands)
Federal income tax at the statutory rate ⁽¹⁾	$	(1,615	)	$	(2,852	)	$	(7,215	)
State income and other taxes, net of federal tax benefit		77			66			(407	)
Federal rate change on deferred assets ⁽²⁾		—			—			22,796
Federal rate change on valuation allowance⁽²⁾		—			—			(22,796	)
Section 162(m) limitation		541			183			45
Permanent items		277			170			518
Expiration of capital loss carryforward		—			1,618			—
Charge for valuation allowance ⁽³⁾		850			992			7,249
Refundable AMT credit		—			(151	)		(2,141	)
Other, net		(25	)		(76	)		(621	)
Total provision (benefit)	$	105		$	(50	)	$	(2,572	)

(1)	The federal income tax at the statutory rate for fiscal 2017 reflects a blended rate of 33.72%, based on the statutory rate decreasing from 35% to 21% on January 1, 2018. The statutory rate for fiscal 2018 and fiscal 2019 is 21%.

(2)	This represents the federal rate change impact as of the end of fiscal 2017. The rate change impact on deferred assets and valuation allowance as a result of the 2017 Tax Act was $22.8 million.

(3)	The change in valuation allowance is impacted by the adoption of ASC 842 in the tax-effected amount of $1.4 million.

As discussed in Note A, the Company’s financial statements reflect the expected future tax consequences of uncertain tax positions that the Company has taken or expects to take on a tax return, based solely on the technical merits of the tax position. The liability for unrecognized tax benefits at February 1, 2020 and February 2, 2019 was approximately $2.0 million and was associated with a prior tax position related to exiting the Company’s direct business in Europe during fiscal 2013. The amount of unrecognized tax benefits has been presented as a reduction in the reported amounts of the Company’s federal and state net operating losses carryforwards. No penalties or interest have been accrued on this liability because the carryforwards have not yet been utilized. The reversal of this liability would result in a tax benefit being recognized in the period in which the Company determines the liability is no longer necessary.

For fiscal 2019, 2018 and 2017, the Company made tax payments of $0.1 million in each fiscal year.