Income Taxes

3 Months Ended

Dec. 30, 2012

Income Taxes

Income Taxes

8. Income Taxes

The effective tax rates for the first quarters of fiscal 2013 and 2012 were 35.0% and 34.7%, respectively.  At December 30, 2012, undistributed earnings of our foreign subsidiaries, primarily in Canada, amounting to approximately $37.8 million, are expected to be permanently reinvested.  Accordingly, no provision for U.S. income taxes or foreign withholding taxes has been made.  Upon distribution of those earnings, we would be subject to U.S. income taxes and foreign withholding taxes.  Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable; however, the potential foreign tax credit associated with the deferred income would be available to partially reduce the resulting U.S. tax liabilities.

During the second quarter of fiscal 2013, the American Taxpayer Relief Act of 2012 was signed into law.  This law retroactively extended the federal research and experimentation credits (“R&E credits”) for amounts incurred from January 1, 2012 through December 31, 2013.  As a result of the retroactive extension, our effective tax rate for the second quarter of fiscal 2013 will include a tax benefit from R&E credits attributable to the last nine months of fiscal 2012 and the first quarter of fiscal 2013.