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Note 15 - Income Taxes

9 Months Ended

Dec. 26, 2020

15.

Income Taxes

The effective tax rate for continuing operations was 20.9% and 23.7% for the nine month periods ended December 26, 2020 and December 28, 2019, respectively. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), among other things, allows NOLs incurred in taxable years beginning after December 31, 2017 and before January 01, 2021 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company was able to carryback the NOL generated in the 2019 tax year at a 21% corporate tax rate to the 2015 tax year at a 35% corporate tax rate. The tax rate difference realized for the NOL carryback decreased the Company’s effective tax rate by 3.2%. The effective tax rate was also decreased 0.5% by the receipt of interest from the previously filed federal NOL carryback and the reversal of interest and penalties from the removal of the uncertain tax benefits for 163(j) interest limitations due to changes in regulations. The overall effective tax rate decrease was offset primarily by a 0.7% increase in the tax rate resulting from federal credits and incentives and a 0.5% increase from state credits and incentives. The dollar amount of the credits and incentives did not change significantly. Projected pre-tax income increased from 2020 to 2021, resulting in the credits and incentives having a smaller impact on the tax rate in 2021.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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