Whole Foods 2007 Annual Report Download - page 63

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57
(10) Income Taxes
Components of income tax expense attributable to continuing operations are as follows (in thousands):
2007 2006 2005
Current federal income tax $ 114,503 $ 120,774 $ 106,087
Current state income tax 34,138 30,632 22,568
Current foreign income tax 389 - -
Total current tax 149,030 151,406 128,655
Deferred federal income tax (17,014) (13,350) (22,462)
Deferred state income tax (5,091) (2,171) (5,411)
Deferred foreign income tax (5,098) - -
Total deferred tax (27,203) (15,521) (27,873)
Total income tax expense $ 121,827 $ 135,885 $ 100,782
Actual income tax expense differed from the amount computed by applying statutory corporate income tax rates to income
from continuing operations before income taxes as follows (in thousands):
2007 2006 2005
Federal tax based on statutory rates $ 106,599 $ 118,900 $ 82,997
Increase (reduction) in income taxes resulting from:
Change in valuation allowance (626) (31) 1,639
Tax exempt interest (1,010) (1,352) -
Share-based compensation 669 (462) 3,310
Deductible state income taxes (10,167) (9,962) (6,005)
Other, net 2,024 331 1,684
Total federal taxes 97,489 107,424 83,625
State income taxes 29,047 28,461 17,157
Foreign income taxes (4,709) - -
Total income tax expense $ 121,827 $ 135,885 $ 100,782
Current income taxes payable as of September 30, 2007 and September 24, 2006 totaled approximately $26.5 million and
$27.2 million, respectively. The tax effects of temporary differences that give rise to significant portions of the deferred tax
assets and deferred tax liabilities for continuing operations are as follows (in thousands):
2007 2006
Deferred tax assets:
Compensation-related costs $ 58,457 $ 43,303
Insurance-related costs 27,665 16,889
Inventories 1,978 -
Lease and other termination accruals 39,861 18
Rent differential 42,935 41,717
Tax basis of fixed assets in excess of financial basis 4,587 -
Net domestic and international operating loss carryforwards 8,305 10,461
Capital loss carryforwards 2,810 2,810
International charitable contribution carryforwards 44 -
Gross deferred tax assets 186,642 115,198
Valuation allowance (9,474) (13,271)
177,168 101,927
Deferred tax liabilities:
Financial basis of fixed assets in excess of tax basis - (21,858)
Inventories - (313)
Capitalized costs expensed for tax purposes (1,384) (1,290)
Other (4,008) (905)
(5,392) (24,366)
Net deferred tax asset $ 171,776 $ 77,561