INCOME TAXES |
9 Months Ended |
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Oct. 28, 2017 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes |
INCOME TAXES
The Company's effective tax rate was 32.4% for the 13 weeks ended October 28, 2017 compared with 25.5% for the 13 weeks ended October 29, 2016 and 33.4% for the 39 weeks ended October 28, 2017 compared with 30.9% for the 39 weeks ended October 29, 2016.
The tax rate for the 13 weeks ended October 28, 2017 includes the effect of a reduction of $5.6 million in the reserve for uncertain tax positions resulting from statute expirations, the reduction of interest accrued on method changes, a decrease in the state tax rate and an increase in work opportunity tax credits in relation to income. The tax rate for the 13 weeks ended October 29, 2016 includes the effect of a reduction in the corporate income tax rate in the state of North Carolina from 4% to 3% for tax years beginning on or after January 1, 2017. This change in North Carolina’s statutory rate significantly decreased the deferred tax liability related to the trade name intangible asset and resulted in an approximate $21.4 million decrease in tax expense in the 13 weeks ended October 29, 2016.
The tax rate for the 39 weeks ended October 28, 2017 includes the effect of a reduction of $5.6 million in the reserve for uncertain tax positions resulting from statute expirations, the reduction of interest accrued on method changes and the effect of a reduction in the statutory rate for North Carolina which resulted in a decrease in the deferred tax liability related to the trade name intangible asset and a $9.9 million decrease in tax expense. The 2016 tax rate includes a one-time benefit for an election allowing the Family Dollar acquisition to be treated as an asset purchase for certain state tax purposes in the quarter ended April 30, 2016 and the $21.4 million decrease in tax expense resulting from the reduction in the corporate income tax rate in the state of North Carolina.
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