9. Income Taxes 

Our earnings before taxes increased 21.4% when compared to the same quarter in 2008, and our income tax expense increased by 3.4%, to $41,546, for the 13-week period ended September 26, 2009, from $40,168 for the 13-week period ended September 27, 2008. The income tax expense increase is due to our earnings before taxes increase offset by a decline in our tax rate.  The effective tax rate was 16.2% and 17.6% for the 13-weeks and 39-weeks ended September 26, 2009 compared to 19.0% for both the 13-weeks and 39-weeks ended September 27, 2008.   The decline in the tax rate for 2009 is related to the release of 2005 income tax reserves for which the statute of limitations has expired.

We have experienced a relatively low effective corporate tax rate due to the proportion of our revenue generated by entities in tax jurisdictions with low statutory rates.   In particular,  the profit entitlement afforded our parent company based on its intellectual property rights ownership of our consumer products along with substantial tax incentives offered by the Taiwanese government on certain high-technology capital investments have continued to generate a relatively low tax rate.