Income Taxes:

12 Months Ended

Dec. 30, 2023

Income Taxes:

Income Taxes:

11.     Income Taxes:

A reconciliation of the expected federal income tax expense based on the federal statutory tax rate to the actual income tax expense is provided below:

	Year Ended
	December 30, 2023		December 31, 2022		December 25, 2021
Federal income tax expense at statutory rate (21%, 21%, 21%)	$	10,785,900	$	10,664,500	$	10,472,100
Change in valuation allowance		(551,600)		(6,600)		(1,914,400)
State and local income taxes, net of federal benefit		1,513,100		1,515,900		1,546,400
Permanent differences, including stock option expenses		(1,372,300)		(955,900)		(2,332,600)
Expiration of attributes		528,600		—		2,057,000
Adjustment to uncertain tax positions		240,100		185,300		163,400
Other, net		39,400		(44,600)		(44,500)
Actual income tax expense	$	11,183,200	$	11,358,600	$	9,947,400

Components of the provision for income taxes are as follows:

	Year Ended
	December 30, 2023		December 31, 2022		December 25, 2021
Current:
Federal	$	9,237,600	$	8,892,200	$	8,782,000
State		1,883,900		2,167,900		2,193,900
Foreign		573,800		586,200		333,500
Current provision		11,695,300		11,646,300		11,309,400
Deferred:
Federal		(504,700)		(351,500)		(1,435,000)
State		(7,400)		63,800		73,000
Deferred provision		(512,100)		(287,700)		(1,362,000)
Total provision for income taxes	$	11,183,200	$	11,358,600	$	9,947,400

The tax effects of temporary differences that give rise to the net deferred income tax assets and liabilities are presented below:

	December 30, 2023		December 31, 2022
Deferred tax assets:
Accounts receivable and lease reserves	$	500	$	1,900
Non-qualified stock option expense		1,769,200		1,540,100
Deferred revenue		1,612,200		1,584,600
Trademarks		36,900		34,700
Lease deposits		6,700		72,700
Impairment of note investments		—		529,500
Lease revenue and initial direct costs		29,200		63,400
Foreign tax credits		631,100		372,100
Valuation allowance		(350,000)		(901,600)
Depreciation and amortization		25,500		—
Other		291,100		271,600
Total deferred tax assets		4,052,400		3,569,000
Deferred tax liabilities:
Depreciation and amortization		—		(28,600)
Total deferred tax liabilities		—		(28,600)
Total net deferred tax assets	$	4,052,400	$	3,540,400

The Company has assessed its taxable earnings history and prospective future taxable income. Based upon this assessment, the Company has determined that it is more likely than not that its deferred tax assets will be realized in future periods and no valuation allowance is necessary, except for the deferred tax assets related to the impairment of note investments (which is a capital loss for tax purposes) and the foreign tax credits. The foreign tax credits will expire after 10 years. As a result, valuation allowances of $0.4 million and $0.9 million as of December 30, 2023 and December 31, 2022, respectively, have been recorded.

The amount of unrecognized tax benefits, including interest and penalties, as of December 30, 2023 and December 31, 2022, was $1,345,000 and $1,050,300, respectively, primarily for potential state taxes. All of these unrecognized tax benefits, if recognized, would impact the effective tax rate.

The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense for all periods presented. The Company had accrued approximately $261,900 and $179,000 for the payment of interest and penalties at December 30, 2023 and December 31, 2022, respectively.

The following table summarizes the activity related to the Company’s unrecognized tax benefits:

	Total
Balance at December 25, 2021	$	677,200
Increases related to current year tax positions		266,800
Expiration of the statute of limitations for the assessment of taxes		(72,700)
Balance at December 31, 2022		871,300
Increases related to current year tax positions		277,600
Subtractions for tax positions of prior years		(65,800)
Balance at December 30, 2023	$	1,083,100

The Company and its subsidiaries file income tax returns in the U.S. federal, numerous state and certain foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2019. We expect various statutes of limitation to expire during the next 12 months. Due to the uncertain response of taxing authorities, a range of outcomes cannot be reasonably estimated at this time.