Income Taxes

12 Months Ended

Jan. 29, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 11 – Income Taxes

The provision for income taxes consisted of:

(In thousands)	2021		2020			2019
Current:
Federal	$	38,576	$	2,233		$	6,799
State		8,076		887			2,175
Puerto Rico		2,730		241			241
Total current		49,382		3,361			9,215
Deferred:
Federal		1,296		2,122			2,749
State		390		(294	)		3
Puerto Rico		-		133			246
Total deferred		1,686		1,961			2,998
Valuation allowance		1,251		237			(379	)
Total provision	$	52,319	$	5,559		$	11,834

Reconciliation between the statutory federal income tax rate and the effective income tax rate is as follows:

Fiscal years	2021			2020			2019
U.S. Federal statutory tax rate		21.0	%		21.0	%		21.0	%
State and local income taxes, net of federal tax    benefit		3.6			2.4			3.2
Puerto Rico		0.6			1.7			0.5
Valuation allowance		0			0			(0.7	)
Tax effect of foreign losses		0			0			0.4
Excess tax benefit on stock-based compensation		(0.5	)		0.4			(3.6	)
Other		0.6			0.3			0.8
Effective income tax rate		25.3	%		25.8	%		21.6	%

Deferred income taxes are the result of temporary differences in the recognition of revenue and expense for tax and financial reporting purposes. The sources of these differences and the tax effect of each are as follows:

(In thousands)	January 29, 2022			January 30, 2021
Deferred tax assets:
Lease obligations	$	55,126		$	56,287
Accrued compensation		3,917			4,957
Inventory		1,018			32
Other		3,719			1,886
Total deferred tax assets		63,780			63,162
Valuation allowance		(1,682	)		(431	)
Total deferred tax assets – net of valuation    allowance		62,098			62,731
Deferred tax liabilities:
Lease ROU assets		50,363			50,609
Property and equipment		6,767			5,064
Other		2,269			1,423
Total deferred tax liabilities		59,399			57,096
Long-term deferred income taxes, net	$	2,699		$	5,635

We have tax credit carryforwards associated with our Puerto Rico operations totaling $1.7 million at January 29, 2022 and $431,000 at January 30, 2021. These credits expire at various times over the next ten years. We have taken a full valuation allowance against these credits given they are not expected to be utilized due to the current differential between U.S. and Puerto Rico tax rates.

As of January 29, 2022 and January 30, 2021, there were no unrecognized tax liabilities or related accrued penalties or interest in other liabilities on the consolidated balance sheets.