Note 12. Income Taxes

12 Months Ended

Sep. 24, 2014

Income Tax Disclosure [Abstract]

Note 12. Income Taxes

The components of the provision for income taxes consist of the following:

	2014	2013	2012
Current:
Federal  ..........................................................................................................................	$        571	$         506	$      7,275
State  ..............................................................................................................................	477	1,748	1,905
Deferred ........................................................................................................................	9,164	72,035	(2,727)
Total income taxes  ......................................................................................................	$  10,212	$    74,289	$      6,453
Reconciliation of effective income tax:
Tax at U.S. statutory rates (35%)  .............................................................................	$  13,656	$    75,762	$    10,919
State income taxes, net of federal benefit  ...............................................................	1,369	5,043	1,063
Federal income tax credits  .........................................................................................	(4,298)	(4,249)	(3,517)
Share-based payments  ..............................................................................................	-	-	25
Tax attributed to noncontrolling interests  ..............................................................	-	(666)	(1,103)
Dividends received deduction  .................................................................................	(3,650)	(2,647)	(963)
Valuation allowance ....................................................................................................	985	-	-
Foreign tax rate differences.........................................................................................	1,993	-	-
Other  .............................................................................................................................	157	1,046	29
Total income taxes  ......................................................................................................	$  10,212	$    74,289	$      6,453

Income taxes paid totaled $4,829 in fiscal year 2014, $1,518 in fiscal year 2013, and $16,802 in fiscal year 2012. Income tax refunds totaled $17 in fiscal year 2014, $52 in fiscal year 2013 and $641 in fiscal year 2012.

As of September 24, 2014, we had approximately $444 of unrecognized tax benefits, including approximately $61 of interest and penalties, which are included in other long-term liabilities in the consolidated balance sheet. During fiscal year 2014, we recognized approximately $37 in potential interest and penalties associated with uncertain tax positions. Our continuing practice is to recognize interest expense and penalties related to income tax matters in income tax expense. The unrecognized tax benefits of $444 would impact the effective income tax rate if recognized.

The following table summarizes the Company’s unrecognized tax benefits, excluding interest and penalties: 

September 28, 2011........................................................................................................................	$      1,480
Gross increases – current period tax positions  ......................................................................	109
Lapse of statute of limitations  ...................................................................................................	(843)
September 26, 2012........................................................................................................................	746
Gross increases – current period tax positions  ......................................................................	25
Gross decreases- prior period tax positions..............................................................................	(6)
Lapse of statute of limitations  ...................................................................................................	(62)
September 25, 2013........................................................................................................................	703
Gross increases – current period tax positions  ...................................................................	37
Gross decreases- prior period tax positions............................................................................	(1)
Lapse of statute of limitations  ..................................................................................................	(356)
September 24, 2014.....................................................................................................................	$        383

We file income tax returns which are periodically audited by various foreign, federal, state, and local jurisdictions. With few exceptions, we are no longer subject to federal, state, and local tax examinations for fiscal years prior to 2011. We believe we have certain state income tax exposures related to fiscal years 2010 through 2014. Because of the expiration of the various state statutes of limitations for these fiscal years, it is possible that the total amount of unrecognized tax benefits will decrease by approximately $216 within 12 months.

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. Our deferred tax assets and liabilities consist of the following:

	2014	2013
Deferred tax assets:
Insurance reserves ..............................................................................................................................	$     3,321	$      2,938
Share-based payments ........................................................................................................................	10	13
Compensation accruals .......................................................................................................................	2,276	1,952
Gift card accruals .................................................................................................................................	1,303	942
Net operating loss credit carryforward .............................................................................................	1,292	60
Valuation allowance on international net operating losses ..........................................................	(1,232)	-
Income tax credit carryforward ..........................................................................................................	1,695	-
Other ......................................................................................................................................................	2,824	2,027
Total deferred tax assets .....................................................................................................................	11,489	7,932
Deferred tax liabilities:
Investments ..........................................................................................................................................	88,050	91,405
Fixed asset basis difference ...............................................................................................................	4,479	3,187
Goodwill and intangibles ....................................................................................................................	4,910	3,376
Total deferred tax liabilities ................................................................................................................	97,439	97,968
Net deferred tax liability ......................................................................................................................	(85,950)	(90,036)
Less current portion ............................................................................................................................	10,812	(5,511)
Long-term liability ................................................................................................................................	$ (96,762)	$   (84,525)

Receivables on the consolidated balance sheet include income tax receivables of $5,050 and $1,662 as of September 24, 2014 and September 25, 2013, respectively. The current deferred tax asset of $10,812 as of September 24, 2014 is included in other current assets on the consolidated balance sheet. The current deferred tax liability of $5,511 as of September 25, 2013 is included in accrued expenses on the consolidated balance sheet.

In September 2013, the IRS issued final and proposed regulations under IRC Sections 162, 263(a), and 168. These regulations provide guidance regarding the deduction and capitalization of expenditures related to tangible property and the disposition of tangible depreciable property. The regulations are generally effective for tax years beginning on or after January 1, 2014 and taxpayers will be allowed to rely on, and early adopt, both the final regulations and the proposed disposition rules to facilitate implementation efforts. The application of the new regulations did not have a material effect on the Company’s consolidated financial statements.