NOTE 8 - FEDERAL AND STATE INCOME TAXES

6 Months Ended

Jun. 28, 2014

NOTE 8 – FEDERAL AND STATE INCOME TAXES

The components of income tax expense (benefit) for the six months ended June 28, 2014 and June 29 2013 were as follows:

	Six Months Ended
	June 28, 2014		June 29, 2013
	(dollars in thousands)
Current	$	181	$	192
Deferred		—		—
Total tax expense	$	181	$	192
Discontinued operations		—		—
Total tax expense	$	181	$	192
Effective tax rate		4.4%		36.3	%

The Company makes its interim tax allocation by applying estimated fiscal year effective tax rates to estimated fiscal year ordinary income together with unusual or infrequently occurring activity for the year-to-date period. Our federal income tax expense continues to be impacted by the valuations taken on prior year tax assets and the release of those valuations against current year income tax. In certain states our income tax is not calculated on our net income but rather on our revenue calculations. As a result, our income tax rate for the six months ended June 28, 2014 is significantly less than the statutory rate.

- 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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