NATIONAL BEVERAGE CORP Income Taxes Disclosure

8.	INCOME TAXES

 

The provision (benefit) for income taxes, reflecting the prospective adoption of ASU 2023-09, consists of the following:

 

		(In thousands)
		Fiscal 2026
Current:
Federal		$	46,936
State			6,295
			53,231
Deferred:
Federal			3,131
State			561
			3,692
Total		$	56,923

 

The provision for income taxes, prior to the prospective adoption of ASU 2023-09, consists of the following:

 

		(In thousands)
		Fiscal				Fiscal
		2025				2024
Current		$	58,192			$	49,683
Deferred			(449	)			3,433
Total		$	57,743			$	53,116

 

The reconciliation of the statutory federal income tax rate to the effective tax rate, reflecting the prospective adoption of ASU 2023-09, is as follows:

 

		Fiscal 2026
(In thousands)		Amount				Percent
Statutory federal income tax rate		$	50,520				21.0	%
State income taxes, net of federal benefit (1)			6,856				2.9
Other			(453	)			(.2	)
Effective tax rate		$	56,923				23.7	%

 

(1)

State income taxes in California, Michigan and Florida made up the majority (greater than 50%) of this category.

 

The reconciliation of the statutory federal income tax rate to the effective tax rate, prior to the prospective adoption of ASU 2023-09, is as follows:

 

		Fiscal				Fiscal
		2025				2024
Statutory federal income tax rate			21.0	%			21.0	%
State income taxes, net of federal benefit			2.8				2.8
Other			(.2	)			(.7	)
Effective income tax rate			23.6	%			23.1	%

 

Total cash income taxes paid in 2026 was $58.4 million, of which $49.6 million related to federal tax and $8.8 million related to state tax jurisdictions.

 

Deferred taxes are recorded to give recognition to temporary differences between the tax bases of assets or liabilities and their reported amounts in the financial statements. A valuation allowance would be provided against deferred tax assets if the Company determines it is more likely than not such assets will not ultimately be realized. Deferred tax assets and liabilities at May 2, 2026 and May 3, 2025 consisted of the following:

 

		(In thousands)
		2026				2025
Deferred tax assets:
Accrued expenses and other		$	4,159			$	3,944
Inventory and amortizable assets			398				532
Total deferred tax assets			4,557				4,476
Deferred tax liabilities:
Property, plant, and equipment			28,269				24,468
Intangibles and other			5,476				3,018
Total deferred tax liabilities			33,745				27,486
Deferred tax liabilities, net		$	29,188			$	23,010

 

At May 2, 2026, the gross amount of unrecognized tax benefits was $2.1 million. During Fiscal 2026, the income tax expense recognized related to uncertain tax positions was immaterial. If the Company were to prevail on all uncertain tax positions, the net effect would be to reduce its income tax expense by approximately $1.7 million. A reconciliation of the changes in the gross amount of unrecognized tax benefits, which amounts are included in other liabilities in the accompanying consolidated balance sheets, is as follows:

 

		(In thousands)
		2026				2025				2024
Beginning balance		$	2,185			$	2,130			$	2,096
Increases due to current period tax positions			42				77				60
Decreases due to lapse of statute of limitations and audit resolutions			(105	)			(22	)			(26	)
Ending balance		$	2,122			$	2,185			$	2,130

 

Accrued interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense. At May 2, 2026, unrecognized tax benefits included accrued interest of $0.3 million. During Fiscal 2026, interest and penalties related to uncertain tax positions recognized in income tax expense were immaterial.

 

Annual income tax returns are filed in the United States and in various state and local jurisdictions. A number of years may elapse before an uncertain tax position, for which the Company has unrecognized tax benefits, are resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that unrecognized tax benefits reflect the most probable outcome. The Company adjusts these unrecognized tax benefits, as well as the related interest, in light of changing facts and circumstances. The resolution of any particular uncertain tax position could require the use of cash and an adjustment to its provision for income taxes in the period of resolution. Federal income tax returns for years subsequent to Fiscal 2020 are subject to examination. Generally, the income tax returns for the various state jurisdictions for years subsequent to Fiscal 2019 are subject to examination.