v3.25.3
Income Taxes
 12 Months Ended
Aug. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax expense consisted of the following:
(in millions)202520242023
Current
Federal$(0.8)$10.4 $38.2 
State2.3 6.9 8.8 
Total1.5 17.3 47.0 
Deferred
Federal5.3 7.1 15.9 
State(2.4)1.0 0.4 
Total2.9 8.1 16.3 
Income tax provision$4.4 $25.4 $63.3 
As of August 30, 2025 and August 31, 2024, $7.3 million and $6.8 million of U.S. federal income taxes receivable was included in prepaid expenses and other current assets on the Consolidated Balance Sheets, respectively.

A reconciliation of the U.S. statutory income tax rate to our effective income tax rate is as follows:
202520242023
U.S. federal statutory rate21.0 %21.0 %21.0 %
State taxes, net of federal benefit2.3 %8.4 %3.1 %
Income tax credits(10.1)%(8.9)%(1.1)%
Non-deductible compensation7.6 %6.6 %1.1 %
Non-deductible debt inducement— %19.4 %— %
Non-deductible goodwill impairment— %16.6 %— %
Valuation allowance(0.3)%5.0 %— %
Tax-free and dividend income(1.2)%(1.1)%(0.1)%
Uncertain tax position settlements and adjustments(2.1)%(1.7)%0.1 %
Other items(2.7)%0.9 %(1.4)%
Effective tax provision rate14.5 %66.2 %22.7 %

Our effective tax rate decreased to 14.5% in Fiscal 2025 compared to 66.2% in Fiscal 2024 primarily due to the prior year's non-deductible debt inducement loss and non-deductible goodwill impairment and, in Fiscal 2025, increased favorable return to provision adjustments and reduced change in the valuation allowance over lower pre-tax income.

The tax effects of temporary differences that give rise to deferred income taxes were as follows:
(in millions)August 30, 2025August 31, 2024
Warranty reserves$17.9 $19.3 
Deferred compensation1.7 2.5 
Self-insurance reserve3.6 4.4 
Stock-based compensation4.2 4.5 
Leases13.4 15.0 
Convertible notes13.7 16.5 
Capitalized research and development costs29.6 23.8 
Other15.6 14.0 
Valuation allowance(1.8)(1.9)
Interest limitation12.5 4.1 
Total deferred tax assets110.4 102.2 
Intangibles73.3 61.5 
Depreciation30.9 30.2 
Leases12.1 13.5 
Total deferred tax liabilities116.3 105.2 
Total deferred income tax liabilities, net$5.9 $3.0 

Changes in the unrecognized tax benefits are as follows:
(in millions)202520242023
Balance at beginning of year$4.9 $5.5 $5.0 
Gross decreases-tax positions in a prior year(1.3)(1.7)(1.5)
Gross increases-tax positions in a prior year— 0.2 1.0 
Gross increases-current year tax positions0.8 0.9 1.0 
Balance at end of year4.4 4.9 5.5 
Accrued interest and penalties0.4 0.5 0.6 
Total unrecognized tax benefits$4.8 $5.4 $6.1 
The amount of unrecognized tax benefits is not expected to change materially within the next 12 months. If the remaining uncertain tax positions are ultimately resolved favorably, $4.4 million of unrecognized tax benefits would have a favorable impact on our effective tax rate. It is our policy to recognize interest and penalties accrued relative to unrecognized tax benefits in income tax expense.

We file a U.S. Federal tax return, as well as returns in various international and state jurisdictions. Although certain years are no longer subject to examination by the Internal Revenue Service ("IRS") and various state taxing authorities, net operating loss carryforwards generated in those years may still be adjusted upon examination by the IRS or state taxing authorities. As of August 30, 2025, our federal returns from Fiscal 2022 to present are subject to review by the IRS. With limited exception, state returns from Fiscal 2021 to present continue to be subject to review by state taxing jurisdictions. Several years may lapse before an uncertain tax position is audited and finally resolved and it is difficult to predict the outcome of such audits. We believe we have adequately reserved for our exposure to potential additional payments for uncertain tax positions in our liability for unrecognized tax benefits.

Recent Tax Legislation

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which included various provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in Fiscal 2025 and others implemented through Fiscal 2027.

During Fiscal 2025, none of the relevant provisions of the OBBBA had a significant impact on our consolidated financial statements. Beginning in Fiscal 2026, the OBBBA could have a more significant impact, particularly related to the reinstatement of 100% bonus depreciation, previously capitalized and unamortized U.S. research and development costs, and changes to interest deductibility. We will continue to assess the implications of the OBBBA.