Note 5 – Income Taxes

The Company is subject to U.S. federal income tax as well as income tax of foreign and state tax jurisdictions. The tax years 2014‑2018 remain open to examination by the major taxing jurisdictions to which the Company is subject, except the Internal Revenue Service for which the tax years 2016‑2018 remain open.

For the thirteen and thirty-nine weeks ended September 28, 2019 the effective tax rate for the Company’s continuing operations was 27.9% and 13.6%, respectively. The effective tax rate for the thirteen and thirty-nine weeks ended September 28, 2019 differed from the U.S. federal statutory rate primarily due to state income taxes, income of our Philippines subsidiary that is subject to different effective tax rates, and share-based compensation that is either not deductible for tax purposes or for which the tax deductible amount is different than the financial reporting amount.

The Company accounts for income taxes in accordance with ASC Topic 740 - Income Taxes (“ASC 740”). Under the provisions of ASC 740, management is required to evaluate whether a valuation allowance should be established against its deferred tax assets. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. For the thirty-nine weeks ended September 28, 2019, there was no material change from fiscal year ended 2018 in the amount of the Company's deferred tax assets that are more likely than not to be realized in future years.

For the thirteen and thirty-nine weeks ended September 29, 2018, the effective tax rate for the Company’s continuing operations was -4.7% and -194.2%, respectively. The effective tax rate for the thirteen and thirty-nine weeks ended September 29, 2018 differed from the U.S. federal statutory rate primarily due to state income taxes, income of our Philippines subsidiary that is subject to different effective tax rates, and share-based compensation that is either not deductible for tax purposes or for which the tax deductible amount is different than the financial reporting amount.