NATIONAL BEVERAGE CORP Income Taxes Disclosure

8.	INCOME TAXES

 

The provision (benefit) for income taxes consisted of the following:

 

		(In thousands)
		Fiscal				Fiscal				Fiscal
		2025				2024				2023
Current		$	58,192			$	49,683			$	48,287
Deferred			(449	)			3,433				(4,009	)
Total		$	57,743			$	53,116			$	44,278

 

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 3, 2025 and April 27, 2024 consisted of the following:

 

		(In thousands)
		2025				2024
Deferred tax assets:
Accrued expenses and other		$	3,944			$	3,923
Inventory and amortizable assets			532				575
Total deferred tax assets			4,476				4,498
Deferred tax liabilities:
Property, plant, and equipment			24,468				25,002
Intangibles and other			3,018				2,743
Total deferred tax liabilities			27,486				27,745
Deferred tax liabilities, net		$	23,010			$	23,247

 

The reconciliation of the statutory federal income tax rate to the effective tax rate is as follows:

 

		Fiscal				Fiscal				Fiscal
		2025				2024				2023
Statutory federal income tax rate			21.0	%			21.0	%			21.0	%
State income taxes, net of federal benefit			2.8				2.8				2.9
Other differences			(.2	)			(.7	)			(.2	)
Effective income tax rate			23.6	%			23.1	%			23.7	%

 

At May 3, 2025, the gross amount of unrecognized tax benefits was $2.2 million. During Fiscal 2025, 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)
		2025				2024				2023
Beginning balance		$	2,130			$	2,096			$	2,079
Increases due to current period tax positions			77				60				75
Decreases due to lapse of statute of limitations and audit resolutions			(22	)			(26	)			(58	)
Ending balance		$	2,185			$	2,130			$	2,096

 

Accrued interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense. At May 3, 2025, unrecognized tax benefits included accrued interest of $0.3 million. During Fiscal 2025, 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 2019 are subject to examination. Generally, the income tax returns for the various state jurisdictions for years subsequent to Fiscal 2018 are subject to examination.