Income Taxes

3 Months Ended

Dec. 27, 2022

IncomeTax [Abstract]

Income Taxes

Note 14. Income Taxes  

We account for income taxes using the liability method, whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. The deferred tax assets are reviewed periodically for recoverability and valuation allowances are adjusted as necessary.

The Company had net loss for the quarter ended December 27, 2022 and net income for the quarter ended December 28, 2021, we have significant net operating loss carryforwards from prior years and a history of net losses through the duration of our existence. Full valuation allowances were established to reduce any deferred tax assets recorded to zero for both the quarters ended December 27, 2022 and December 28, 2021. Although we have established a full valuation allowance on our deferred tax assets, we are subject to income tax in certain jurisdictions where we do not have substantial net operating loss carry forwards. For the quarter ended December 27, 2022 we did not recognize any provision for income taxes as we estimated no current tax liability for either federal or state jurisdictions resulting in an effective income tax rate of zero for the period. For the period ended December 28, 2021, we recognized a provision for income taxes of $8,000 related to our estimate of current income taxes payable resulting in an effective tax rate of 2.0%.

The Company is subject to taxation in various jurisdictions within the U.S. The Company continues to remain subject to examination by U.S. federal authorities for the years 2019 through 2022. The Company believes that its income tax filing positions and deductions will be sustained upon audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Therefore, no reserves for uncertain income tax positions have been recorded. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. No accrual for interest and penalties was considered necessary as of December 27, 2022.