Note 13 - Income Taxes

6 Months Ended

Mar. 26, 2024

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 13. 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’s effective income tax rate for the three periods ended March 26, 2024 was (12.82%), an increase from the effective income tax rate of (1,487%) for the three periods ended March 28, 2023. The Company’s effective tax rate for the six periods ended March 26, 2024 was (1.83%), an increase from an effective income tax rate of (1,836%) for the six periods ended March 28, 2023. The increase is due to the Company’s valuation allowance release that occurred during the prior year quarter and the prior year.

The Company is subject to taxation in various jurisdictions within the United States. The Company continues to remain subject to examination by United States federal authorities for the years 2020 through 2023. 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 March 26, 2024.