Income Taxes

12 Months Ended

Jan. 28, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 11 – Income Taxes

The provision for income taxes consisted of:

(In thousands)	2022		2021		2020
Current:
Federal	$	15,542	$	38,576	$	2,233
State		4,919		8,076		887
Puerto Rico		2,050		2,730		241
Total current		22,511		49,382		3,361
Deferred:
Federal		11,712		1,296		2,122
State		1,878		390		(294	)
Puerto Rico		-		-		133
Total deferred		13,590		1,686		1,961
Valuation allowance		953		1,251		237
Total provision	$	37,054	$	52,319	$	5,559

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

Fiscal years	2022			2021			2020
U.S. Federal statutory tax rate		21.0	%		21.0	%		21.0	%
State and local income taxes, net of federal tax    benefit		3.5			3.6			2.4
Puerto Rico		0.6			0.6			1.7
Excess tax benefit on stock-based compensation		(0.4	)		(0.5	)		0.4
Other		0.5			0.6			0.3
Effective income tax rate		25.2	%		25.3	%		25.8	%

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 28, 2023			January 29, 2022
Deferred tax assets:
Lease obligations	$	83,473		$	55,126
Accrued compensation		4,496			3,917
Inventory		767			1,018
Other		4,639			3,719
Total deferred tax assets		93,375			63,780
Valuation allowance		(2,635	)		(1,682	)
Total deferred tax assets – net of valuation    allowance		90,740			62,098
Deferred tax liabilities:
Lease ROU assets		78,627			50,363
Property and equipment		19,673			6,767
Other		4,284			2,269
Total deferred tax liabilities		102,584			59,399
Net long-term (liability) / asset	$	(11,844	)	$	2,699

We have tax credit carryforwards associated with our Puerto Rico operations totaling $2.6 million at January 28, 2023 and $1.7 million at January 29, 2022. 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 28, 2023 and January 29, 2022, there were no unrecognized tax liabilities or related accrued penalties or interest.