Income Taxes (Tables)

12 Months Ended

Jan. 03, 2023

Income Taxes

Schedule of provision for income taxes

The provision for income taxes consisted of the following (in thousands):

	Fiscal Year
	2022		2021		2020
Income/(Loss) before income taxes	$	32,892	$	71,620	$	(356,036)
Income tax provision/(benefit):
Current:
Federal	$	3,520	$	15,746	$	(38,414)
State		4,895		4,350		2,971
Total current		8,415		20,096		(35,443)
Deferred:
Federal		(17,733)		(20,434)		(52,607)
State		(913)		(415)		(14,621)
Total deferred		(18,646)		(20,849)		(67,228)
Total benefit	$	(10,231)	$	(753)	$	(102,671)

Schedule of reconciles the U.S. federal statutory rate to the effective tax rate

	Fiscal Year
	2022		2021		2020
U.S. federal statutory rate	21.0	%	21.0	%	21.0	%
State and district income taxes, net of federal benefit	8.9		4.2		2.6
Credit for FICA taxes paid on tips	(66.4)		(24.2)		2.1
Other credits and incentives	(10.7)		(4.2)		0.3
Impact of net operating loss carryback	0.0		(6.3)		3.4
Deferred compensation	9.7		(2.9)		0.6
Equity compensation	5.5		0.0		(0.4)
Uncertain tax positions	(2.3)		10.3		0.0
Non-deductible executive compensation	2.8		0.3		(0.1)
Other	0.4		0.7		(0.7)
Effective tax rate	(31.1)	%	(1.1)	%	28.8	%

Schedule of deferred tax assets and liabilities

Following are the temporary differences that created our deferred tax assets and liabilities (in thousands):

	January 3, 2023		December 28, 2021
Deferred tax assets:
Staff member benefits	$	31,325	$	36,295
Insurance reserves		14,374		12,897
Operating lease liability		323,094		315,403
Deferred income		35,928		33,075
Tax credit carryforwards		57,710		34,871
Goodwill		21,331		19,103
Stock-based compensation		10,769		10,122
State and foreign net operating loss carryforwards		2,435		3,005
Other		604		1,063
Subtotal		497,570		465,834
Less: Valuation allowance		(1,223)		(1,036)
Total	$	496,347	$	464,798
Deferred tax liabilities:
Property and equipment	$	(113,565)	$	(109,019)
Prepaid expenses		(8,151)		(7,312)
Inventory		(8,399)		(7,802)
Accrued rent		(5,285)		(5,087)
Operating lease asset		(283,921)		(277,220)
Other		(781)		(724)
Total	$	(420,102)	$	(407,164)
Net deferred tax asset	$	76,245	$	57,634

Schedule of reconciliation of our uncertain tax positions

A reconciliation of the beginning and ending amount of our uncertain tax positions is as follows (in thousands):

	Fiscal Year
	2022		2021		2020
Balance at beginning of year	$	4,799	$	655	$	704
Additions related to prior year tax positions		227		4,157		—
Additions related to current period tax positions		(54)		(13)		(49)
Reductions related to settlements with taxing authorities		(1,185)		—		—
Balance at end of year	$	3,787	$	4,799	$	655