Entity information:
7.
INCOME TAXES
    
The Company is required to analyze all material positions it has taken or plans to take in all tax returns that have been filed or should have been filed with all taxing authorities for all years still subject to challenge by those taxing authorities. If the position taken is “more-likely-than-
not”
to be sustained by the taxing authority on its technical merits and if there is more than a
50%
likelihood that the position would be sustained if challenged and considered by the highest court in the relevant jurisdiction, the tax consequences of that position should be reflected in the taxpayer’s financial statements.
 
The Company had
no
material unrecognized tax benefits at
July 2, 2017
nor does it expect any significant change in that status during the next
twelve
months.
No
accrued interest or penalties on
uncertain tax positions have been included on the consolidated statements of earnings and comprehensive earnings or the consolidated balance sheet. Should the Company adopt tax positions for which it would be appropriate to accrue
interest and penalties, such costs would be reflected in the tax expense for the period in which such costs accrued. The Company is subject to U.S. Federal income tax and to several state jurisdictions. Returns filed for tax periods ending after
June 30,
2013
are still open to examination by those relevant taxing authorities.
 
    The significant components of the Company's deferred tax assets and
liabilities were as follows:
 
   
July 2,
   
July 3,
  
   
2017
    
2016
  
Deferred tax assets:
                
Other
  
$
8,162
    
$
-
  
Total deferred tax assets
  
 
8,162
      
-
  
Deferred tax liabilities:
                
Land, buildings, and equipment
  
$
521,818
     $
596,688
  
Unrealized gain on available-for-sale securities
  
 
1,529,585
      
1,840,861
  
Prepaid expenses and other
  
 
(15,582
)
    
(24,725
)
Total deferred tax liabilities
  
 
2,035,821
      
2,412,824
  
Net deferred income taxes
  
$
2,027,659
     $
2,412,824
  
 
Income tax expense differs from the amounts computed by applying the U.S.
Federal income tax rate to income before tax for the following reasons:
 
   
For the Years Ended
  
   
2017
    
2016
  
                 
Taxes computed at statutory rate
  
 
34.0
%
    
34.0
%
State income taxes, net of Federal income tax benefit
  
 
3.2
      
4.1
  
Dividends received exclusion
  
 
(1.8
)
    
(2.1
)
All other net
  
 
(1.0
)
 
 
(1.0
)
Net effective rate
  
 
34.4
%
    
35.0
%