INCOME TAXES |
6 Months Ended |
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Jul. 30, 2016 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes |
INCOME TAXES
The Company's effective tax rate was 36.9% for the 13 weeks ended July 30, 2016 compared with a benefit of 31.1% for the 13 weeks ended August 1, 2015 and 33.0% for the 26 weeks ended July 30, 2016 compared with a benefit of 1.7% for the 26 weeks ended August 1, 2015. The 2016 effective tax rate includes a one-time election allowing the Family Dollar acquisition to be treated as an asset purchase for certain state tax purposes, the adoption of the new ASU under which the incremental tax benefit recognized upon RSU vesting is recorded in income tax expense and an increase in work opportunity credits in relation to income for the 26 weeks ended July 30, 2016. The benefit recorded in 2015 was primarily attributable to pre-tax losses in 2015 created by higher interest expense, including debt prepayment penalties and expenses related to the Acquisition. Some of the Acquisition-related costs in 2015 were nondeductible for tax purposes. On August 2, 2016, the state of North Carolina announced that it would lower its corporate income tax rate from 4% to 3% for tax years beginning on or after January 1, 2017. The Company anticipates this change in North Carolina’s statutory rate will significantly decrease its deferred tax liability and result in an estimated $20.0 million decrease in tax expense in the third quarter of 2016.
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