v3.24.1
Income Taxes
 12 Months Ended
Feb. 04, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The effective tax rate for fiscal 2023 was 22.2%, compared to 21.0% for fiscal 2022. The previous year tax provision includes higher excess tax benefits associated with share-based compensation.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law. Intended to provide economic relief to those impacted by the COVID-19 pandemic, the CARES Act includes provisions, among others, allowing for the carry-back of net operating losses generated in fiscal 2018, 2019 and 2020. The Company has $0.8 of federal tax refunds remaining from the fiscal 2020 carryback claim filed during fiscal 2021.
The following table sets forth our income tax provision:
February 4, 2024January 29, 2023January 30, 2022
Current provision:
Federal$8.3 $2.3 $21.9 
State and local9.4 6.5 4.6 
Foreign1.3 0.1 0.3 
Total current provision19.0 8.9 26.8 
Deferred provision:
Federal16.2 25.0 (2.4)
State and local2.5 3.1 (5.4)
Foreign(1.5)(0.5)— 
Total deferred provision (benefit)17.2 27.6 (7.8)
Provision for income taxes$36.2 $36.5 $19.0 
The following table reconciles the effective tax rate to the federal income tax rate:
February 4, 2024January 29, 2023January 30, 2022
Federal income tax rate21.0 %21.0 %21.0 %
State and local income taxes, net of federal benefit4.8 %5.7 %5.0 %
Permanent differences2.3 %2.9 %2.0 %
Tax credits(7.7)%(5.5)%(4.9)%
Share-based compensation(0.4)%(1.3)%(3.6)%
Other2.2 %(1.8)%(4.6)%
Effective tax rate22.2 %21.0 %14.9 %
Components of the deferred income tax liability, net consist of the following as of the periods indicated:
February 04, 2024January 29, 2023
Deferred tax assets:
Deferred revenue$16.9 $18.1 
Long-term lease obligation426.5 434.8 
Accrued liabilities5.1 9.7 
Workers compensation and general liability insurance5.2 4.9 
Share-based compensation6.2 6.3 
Financing obligation20.9 — 
Net operating loss carryovers4.2 27.2 
Tax credit carryovers7.1 4.6 
Excess business interest expense19.1 0.5 
Other4.0 5.6 
Subtotal515.2 511.7 
Less: Valuation allowance(1.7)(3.9)
Total deferred tax assets$513.5 $507.8 
Deferred tax liabilities:
Trademark/tradename$44.1 $43.8 
Property and equipment197.0 179.5 
Right of use assets341.8 348.4 
Other debt related items11.9 — 
Other2.5 1.9 
Total deferred tax liabilities$597.3 $573.6 
Deferred tax liability, net$83.8 $65.8 
As of February 4, 2024, we had $84.1 of state net operating loss carryforwards, which will begin to expire in fiscal 2024, and foreign tax credit carryovers of $1.6, which will begin to expire in 2028.
During fiscal 2023, the decrease in the valuation allowance of $(2.3) primarily relates to the use of available net operating loss carryforwards and the release of previously established allowance for certain net operating loss carryforwards due to improved operating performance.
A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:
February 4, 2024January 29, 2023January 30, 2022
Balance at beginning of year$1.9 $3.0 $2.5 
Additions for tax positions of prior years1.1 — — 
Reductions for tax positions of prior years— (0.8)— 
Additions for tax positions of current year6.1 — 0.8 
Lapse of statute of limitations(0.5)(0.3)(0.3)
Balance at end of year$8.6 $1.9 $3.0 
The February 4, 2024 balance of unrecognized tax benefits includes $2.4, that if recognized, would affect our effective tax rate. At February 4, 2024, and January 29, 2023, we had accrued interest and penalties of $0.6 and $0.5, respectively. The Company recorded accrued interest related to the unrecognized tax benefits and penalties as a component of the provision for income taxes recognized in the Consolidated Statements of Comprehensive Income.
In the next twelve months, it is reasonably possible that our unrecognized tax benefits could change due to the resolution of certain tax matters, including payments on those tax matters or due to lapse of the statute of limitations. These resolutions and payments could reduce our unrecognized tax benefits by up to $0.6.
We file consolidated income tax returns with all our domestic subsidiaries, which are periodically audited by various federal, state and foreign jurisdictions. We are generally no longer subject to federal, state, or foreign income tax examinations for years prior to 2014.
The Company recorded excess tax expense (benefits) of $(0.8), $(3.1), and $(6.9), in fiscal 2023, fiscal 2022 and fiscal 2021, respectively, to the provision for income taxes in the Consolidated Statements of Comprehensive Income.