Note 4: Income Taxes

The effective income tax rate decreased to 36.5% for the first quarter of fiscal 2016 compared to 37.2% in the first quarter of fiscal 2015. The decline in our effective rate is primarily the result of comparatively lower estimated state tax rates as of May 1, 2016, partially offset by the reduced impact of the FICA Tip Credit on our effective rate as a result of higher pre-tax income.

As of May 1, 2016, we had no remaining available federal tax credit carryovers. We had approximately $57,200 of state net operating loss carryforwards, which can generally be carried forward for 20 years. Included in our state net operating loss carryforwards is approximately $11,200 related to excess stock compensation that will be recorded in additional paid-in capital when realized as a reduction in taxes payable.