BJs RESTAURANTS INC Income Taxes Disclosure
11. Income Taxes
Income before income tax expense (in thousands):
|
|
Fiscal Year |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
United States |
|
$ |
47,233 |
|
|
$ |
8,265 |
|
|
$ |
10,100 |
|
Total income before income taxes |
|
$ |
47,233 |
|
|
$ |
8,265 |
|
|
$ |
10,100 |
|
|
|
|
|
|
|
|
|
|
|
|||
Income tax benefit consists of the following (in thousands):
|
|
Fiscal Year |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Current: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
1,085 |
|
|
$ |
2,780 |
|
|
$ |
1,378 |
|
State |
|
|
2,322 |
|
|
|
969 |
|
|
|
897 |
|
|
|
|
3,407 |
|
|
|
3,749 |
|
|
|
2,275 |
|
Deferred: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
|
(5,167 |
) |
|
|
(10,891 |
) |
|
|
(11,344 |
) |
State |
|
|
185 |
|
|
|
(1,280 |
) |
|
|
(491 |
) |
|
|
|
(4,982 |
) |
|
|
(12,171 |
) |
|
|
(11,835 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Income tax benefit |
|
$ |
(1,575 |
) |
|
$ |
(8,422 |
) |
|
$ |
(9,560 |
) |
The provision for income taxes differs from the amount that would result from applying the federal statutory rate as follows (dollar amounts in thousands):
|
|
Fiscal Year |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
||||||||||||
Income tax at statutory rates |
|
$ |
9,919 |
|
|
21.0 |
% |
|
$ |
1,739 |
|
|
21.0 |
% |
|
$ |
2,121 |
|
|
21.0 |
% |
State income taxes, net of federal benefit (1) |
|
|
2,168 |
|
|
4.6 |
|
|
|
458 |
|
|
5.5 |
|
|
|
583 |
|
|
5.8 |
|
Permanent differences |
|
|
(427 |
) |
|
(0.9 |
) |
|
|
875 |
|
|
10.6 |
|
|
|
776 |
|
|
7.7 |
|
Income tax credits (2) |
|
|
(12,547 |
) |
|
(26.5 |
) |
|
|
(12,186 |
) |
|
(147.1 |
) |
|
|
(11,910 |
) |
|
(117.9 |
) |
Return to provision |
|
|
49 |
|
|
0.1 |
|
|
|
35 |
|
|
0.4 |
|
|
|
90 |
|
|
0.9 |
|
Stock warrant extension |
|
|
— |
|
|
— |
|
|
|
971 |
|
|
11.7 |
|
|
|
— |
|
|
— |
|
Prior year tax credit true-up |
|
|
(30 |
) |
|
(0.1 |
) |
|
|
357 |
|
|
4.3 |
|
|
|
(649 |
) |
|
(6.4 |
) |
Change in unrecognized tax benefit |
|
|
(127 |
) |
|
(0.3 |
) |
|
|
(14 |
) |
|
(0.2 |
) |
|
|
(237 |
) |
|
(2.3 |
) |
Change in valuation allowance |
|
|
(186 |
) |
|
(0.4 |
) |
|
|
(703 |
) |
|
(8.5 |
) |
|
|
(262 |
) |
|
(2.6 |
) |
Other, net |
|
|
(394 |
) |
|
(0.8 |
) |
|
|
46 |
|
|
0.4 |
|
|
|
(72 |
) |
|
(0.9 |
) |
|
|
$ |
(1,575 |
) |
|
(3.3 |
)% |
|
$ |
(8,422 |
) |
|
(101.9 |
)% |
|
$ |
(9,560 |
) |
|
(94.7 |
)% |
Income taxes paid consisted of the following (in thousands):
|
|
Fiscal Year |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
U.S. Federal |
|
$ |
3,100 |
|
|
$ |
2,027 |
|
|
$ |
(4 |
) |
State |
|
|
|
|
|
|
|
|
|
|||
California |
|
|
950 |
|
|
|
496 |
|
|
|
(1,200 |
) |
Texas |
|
|
140 |
|
|
|
429 |
|
|
|
355 |
|
Virginia |
|
|
— |
|
|
|
(10 |
) |
|
|
37 |
|
Other |
|
|
559 |
|
|
|
383 |
|
|
|
83 |
|
State subtotal |
|
|
1,649 |
|
|
|
1,298 |
|
|
|
(725 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Total cash paid for income taxes (net of refunds) |
|
$ |
4,749 |
|
|
$ |
3,325 |
|
|
$ |
(729 |
) |
The components of the deferred income tax asset (liability) consist of the following (in thousands):
|
|
December 30, 2025 |
|
|
December 31, 2024 |
|
||
Deferred income tax asset: |
|
|
|
|
|
|
||
Accrued expenses |
|
$ |
12,251 |
|
|
$ |
12,526 |
|
Other |
|
|
4,518 |
|
|
|
8,436 |
|
Deferred revenues |
|
|
— |
|
|
|
23 |
|
Gift cards |
|
|
1,223 |
|
|
|
1,128 |
|
Stock-based compensation |
|
|
4,245 |
|
|
|
3,667 |
|
Operating lease liability |
|
|
104,620 |
|
|
|
111,254 |
|
Income tax credits |
|
|
86,933 |
|
|
|
74,826 |
|
Net operating losses |
|
|
4,263 |
|
|
|
4,831 |
|
State tax |
|
|
496 |
|
|
|
358 |
|
Gross deferred income tax asset |
|
|
218,549 |
|
|
|
217,049 |
|
Valuation allowance |
|
|
— |
|
|
|
(186 |
) |
Deferred income tax asset, net of valuation allowance |
|
|
218,549 |
|
|
|
216,863 |
|
|
|
|
|
|
|
|
||
Deferred income tax liability: |
|
|
|
|
|
|
||
Property and equipment |
|
|
(53,754 |
) |
|
|
(51,516 |
) |
Intangible assets |
|
|
(2,821 |
) |
|
|
(2,807 |
) |
Operating lease assets |
|
|
(89,943 |
) |
|
|
(96,255 |
) |
Smallwares |
|
|
(4,731 |
) |
|
|
(3,967 |
) |
Deferred income tax liability |
|
|
(151,249 |
) |
|
|
(154,545 |
) |
Net deferred income tax asset |
|
$ |
67,300 |
|
|
$ |
62,318 |
|
At December 30, 2025, we had federal and state income tax credit carryforwards of approximately $87.1 million and $0.1 million, respectively, consisting primarily of the credit for FICA taxes paid on reported team member tip income. The FICA tax credits will begin to expire in 2039.
At December 30, 2025, we have state and city net operating loss carryforwards of $90.5 million with statutory carryforward periods ranging from 5 years to 20 years. The earliest year that a material state net operating loss will expire is 2027.
We have completed an analysis of our ability to use our federal and state tax credit and net operating loss carry forwards. As of December 30, 2025, we have determined that no valuation allowance is required against federal tax credit carryforwards or against certain state net operating loss and tax credit carryforwards. As of December 31, 2024, we determined that no valuation allowance is required against federal tax credit carryforwards; however, we recorded a $0.2 million valuation allowance against certain state net operating loss and tax credit carryforwards, net of the federal benefit which were not more likely than not to be realized prior to expiration.
Changes in valuation allowance were as follows (in thousands):
|
|
Fiscal Year |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Valuation allowance beginning of the year |
|
$ |
186 |
|
|
$ |
889 |
|
|
$ |
1,151 |
|
Allowances taken or written off |
|
|
(186 |
) |
|
|
(703 |
) |
|
|
(262 |
) |
Valuation allowance end of the year |
|
$ |
— |
|
|
$ |
186 |
|
|
$ |
889 |
|
We recognize interest and penalties related to uncertain tax positions in income tax expense. At December 30, 2025 and December 31, 2024, we had accrued $0.1 million for interest and penalties with respect to uncertain tax positions.
As of December 30, 2025, unrecognized tax benefits recorded was approximately $0.8 million, of which approximately $0.8 million, if reversed would impact our effective tax rate. We anticipate no change in our liability for unrecognized tax benefits within the next twelve-month period.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
|
|
Fiscal Year |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Gross unrecognized tax benefits at beginning of year |
|
$ |
874 |
|
|
$ |
967 |
|
|
$ |
1,249 |
|
Increases for tax positions taken in prior years |
|
|
— |
|
|
|
29 |
|
|
|
102 |
|
Decreases for tax positions taken in prior years |
|
|
(46 |
) |
|
|
— |
|
|
|
— |
|
Increases for tax positions taken in the current year |
|
|
89 |
|
|
|
134 |
|
|
|
104 |
|
Lapse in statute of limitations |
|
|
(123 |
) |
|
|
(256 |
) |
|
|
(488 |
) |
Gross unrecognized tax benefits at end of year |
|
$ |
794 |
|
|
$ |
874 |
|
|
$ |
967 |
|
Our uncertain tax positions are related to tax years that remain subject to examination by tax agencies. As of December 30, 2025, the earliest tax year still subject to examination by the Internal Revenue Service is 2022. The earliest year still subject to examination by a significant state or local taxing authority is 2021.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 28, 2023 | |
| 2021 | Feb 25, 2022 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.