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Income Tax Expense | 12 Months Ended
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Mar. 31, 2023
Income Tax Expense [Abstract] |
Income Tax Expense (Benefit) | 8.INCOME TAXES Income from continuing operations before income taxes was as follows:
Years Ended March 31, |  | 2023 |  | 2022 |  | 2021
United States operations |  | $ | (16,759) |  |  | $ | 79,662 |  |  | $ | 326,991 |
Ireland operations |  | 62,664 |  |  | 88,078 |  |  | 73,442 |
Other locations operations |  | 111,443 |  |  | 146,763 |  |  | 117,100 |
|  | $ | 157,348 |  |  | $ | 314,503 |  |  | $ | 517,533 |
The components of the provision for income taxes related to income from continuing operations consisted of the following:
Years Ended March 31, |  | 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |  |
United States federal |  | $ | 138,208 |  |  | $ | 88,158 |  |  | $ | 57,550 |
United States state and local |  | 33,234 |  |  | 21,438 |  |  | 16,272 |
Ireland |  | 8,837 |  |  | 12,002 |  |  | 9,244 |
Other locations |  | 61,446 |  |  | 53,354 |  |  | 36,699 |
|  | 241,725 |  |  | 174,952 |  |  | 119,765 |
Deferred: |  |  |  |  |  |
United States federal |  | (114,523) |  |  | (73,833) |  |  | 7,523 |
United States state and local |  | (50,530) |  |  | (17,124) |  |  | (550) |
Ireland |  | (864) |  |  | (739) |  |  | (787) |
Other locations |  | (24,273) |  |  | (11,623) |  |  | (5,288) |
|  | (190,190) |  |  | (103,319) |  |  | 898 |
Total Provision for Income Taxes |  | $ | 51,535 |  |  | $ | 71,633 |  |  | $ | 120,663 |
The total provision for income taxes can be reconciled to the tax computed at the Ireland statutory tax rate as follows:
Years Ended March 31, |  | 2023 |  | 2022 |  | 2021
National statutory tax rate |  | 12.5 | % |  | 12.5 | % |  | 12.5 | %
(Decrease) increase in accruals for uncertain tax positions |  | (0.1) | % |  | 0.2 | % |  | (0.1) | %
U.S. state and local taxes, net of federal income tax benefit |  | (10.8) | % |  | 1.4 | % |  | 2.4 | %
(Decrease) increase in valuation allowances |  | (0.1) | % |  | 0.9 | % |  | 0.3 | %
U.S. research and development credit |  | (1.8) | % |  | (0.8) | % |  | (0.5) | %
U.S. foreign income tax credit |  | (1.2) | % |  | (1.1) | % |  | (0.3) | %
Difference in non-Ireland tax rates |  | 8.6 | % |  | 12.6 | % |  | 8.3 | %
U.S. federal audit adjustments |  | — | % |  | — | % |  | 2.1 | %
Impairment of nondeductible goodwill |  | 29.0 | % |  | — | % |  | — | %
Excess tax benefit for equity compensation |  | (2.7) | % |  | (5.1) | % |  | (1.9) | %
Tax rate changes on deferred tax assets and liabilities |  | 0.4 | % |  | 2.3 | % |  | 0.4 | %
U.S. tax reform impact, GILTI and FDII |  | (1.3) | % |  | (0.9) | % |  | (0.6) | %
Capitalized acquisition, redomiciliation costs |  | — | % |  | 1.8 | % |  | 0.6 | %
All other, net |  | 0.3 | % |  | (1.0) | % |  | 0.1 | %
Total Provision for Income Taxes |  | 32.8 | % |  | 22.8 | % |  | 23.3 | %
Unrecognized Tax Benefits. We classify uncertain tax positions and related interest and penalties as long-term liabilities within “Other liabilities” in our accompanying Consolidated Balance Sheets, unless they are expected to be paid within 12 months, in which case, the uncertain tax positions would be classified as current liabilities within “Accrued income taxes.” We recognize interest and penalties related to unrecognized tax benefits within “Income tax expense” in our accompanying Consolidated Statements of Income. A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows:
|  | 2023 |  | 2022
Unrecognized Tax Benefits Balance at April 1 |  | $ | 2,906 |  |  | $ | 2,295 |
Increases for tax provisions of current year |  | 63 |  |  | — |
Decreases for tax provisions of prior year |  | — |  |  | (135) |
Balances related to acquired/disposed businesses |  | (503) |  |  | 746 |
Other, including currency translation |  | 21 |  |  | — |
Unrecognized Tax Benefits Balance at March 31 |  | $ | 2,487 |  |  | $ | 2,906 |
We recognized interest and penalties related to uncertain tax positions in the provision for income taxes. As of March 31, 2023 and 2022, we had $152 and $152 accrued for interest and penalties, respectively. If all unrecognized tax benefits were recognized, the net impact on the provision for income tax expense would be $2,640. The increase in unrecognized tax benefits from prior year is due to the additions of new positions. It is reasonably possible that during the next 12 months, there will be no material reductions in unrecognized tax benefits as a result of the expiration of various statutes of limitations or other matters. We operate in numerous t axing jurisdictions and are subject to regular examinations by various United States federal, state and local, as well as foreign jurisdictions. We are no longer subject to United States federal examinations for years before fiscal 2018 and, with limited exceptions, we are no longer subject to United States state and local, or non-United States, income tax examinations by tax authorities for years before fiscal 2017. W e remain subject to tax authority audits in various jurisdictions wherever we do business. In the fourth quarter of fiscal 2021, we completed an appeals process with the U.S. Internal Revenue Service (the “IRS”) regarding proposed audit adjustments related to deductibility of interest paid on intercompany debt for fiscal years 2016 through 2017. An agreement was reached on final interest rates, which also impacts subsequent years through 2020. We estimate the total federal, state, and local tax impact of the settlement to be approximately $12,000, for the fiscal years 2016 through 2020, of which approximately $7,500 has been paid through March 31, 2023. In May 2021, we received two notices of proposed tax adjustment from the IRS regarding deemed dividend inclusions and associated withholding tax. The notices relate to the fiscal and calendar year 2018. The IRS adjustments would result in a cumulative tax liability of approximately $50,000. We are contesting the IRS’s assertions. We have not established reserves related to these notices. An unfavorable outcome is not expected to have a material adverse impact on our consolidated financial position but it could be material to our consolidated results of operations and cash flows for any one period. We estimate that the tax benefit from our Costa Rican Tax Holiday is $2,000 (or $0.02 per fully diluted share), annually. The Tax Holiday runs fully exempt from income tax through 2025, and partially exempt through 2029. Deferred Taxes. The significant components of the deferred tax assets and liabilities recorded in our accompanying balance sheets at March 31, 2023 and 2022 were as follows:
March 31, |  | 2023 |  | 2022
Deferred Tax Assets: |  |  |  |
Post-retirement benefit accrual |  | $ | 1,737 |  |  | $ | 2,086 |
Compensation |  | 15,858 |  |  | 14,340 |
Net operating loss carryforwards |  | 37,667 |  |  | 25,550 |
Accrued expenses |  | 13,150 |  |  | 12,092 |
Insurance |  | 2,268 |  |  | 2,561 |
Deferred income |  | 23,967 |  |  | 20,688 |
Bad debt |  | 3,763 |  |  | 2,187 |
Research & experimental expenditures |  | 15,382 |  |  | — |
Operating leases (1) |  | 46,781 |  |  | 44,401 |
Foreign tax credit carryforwards |  | 33,559 |  |  | 36,036 |
Other |  | 11,701 |  |  | 8,579 |
Deferred Tax Assets |  | 205,833 |  |  | 168,520 |
Less: Valuation allowance |  | 20,315 |  |  | 24,691 |
Total Deferred Tax Assets |  | 185,518 |  |  | 143,829 |
Deferred Tax Liabilities: |  |  |  |
Depreciation and depletion |  | 98,601 |  |  | 110,951 |
Operating leases (1) |  | 45,834 |  |  | 43,593 |
Intangibles |  | 630,589 |  |  | 755,980 |
Pension |  | 2,644 |  |  | 2,004 |
Other |  | 3,186 |  |  | 3,473 |
Total Deferred Tax Liabilities |  | 780,854 |  |  | 916,001 |
Net Deferred Tax Assets (Liabilities) |  | $ | (595,336) |  |  | $ | (772,172) |
(1) For more information regarding our operating leases, see Note 10 titled, "Commitments and Contingencies." At March 31, 2023, we had U.S. federal operating loss carryforwards of $9,407, which remain subject to a 20 year carryforward period. Additionally, we had non-U.S. operating loss carry forwards of $126,443. Although the majority of the non-U.S. carryforwards have indefinite expiration periods, those carryforwards that have definite expiration periods will expire if unused between fiscal years 2024 and 2044. In addition, we have recorded pre-valuation allowance tax benefits of $3,391 related to state operating loss carryforwards. If unused, these state operating loss carryforwards will expire between fiscal years 2024 and 2044. At March 31, 2023, we had $35,220 of pre-valuation allowance tax credit carryforwards of which $26,728 relates to offsets of deferred tax liabilities related to German branches of a U.S. subsidiary. These credit carryforwards can be used through fiscal 2033. We review the need for a valuation allowance against our deferred tax assets. A valuation allowance of $20,315 has been applied to a portion of the net deferred tax assets because we do not believe it is more-likely-than-not that we will receive future benefit. The valuation allowance decreased during fiscal 2023 by $4,376. Other than the tax expense previously recorded for the one-time transition tax on unremitted earnings of non-US subsidiaries, no additional provision has been made for income taxes on undistributed earnings of foreign subsidiaries as the Company’s position is that these amounts continue to be indefinitely reinvested. The amount of undistributed earnings of subsidiaries was approximately $1,915,000 at March 31, 2023. It is not practicable to estimate the additional income taxes and applicable withholding taxes that would be payable on the remittance of such undistributed earnings. On October 8, 2021, the Organization for Economic Co-operation and Development ("OECD") announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting which agreed to a two-pillar solution to address tax challenges arising from digitalization of the economy. On December 20, 2021, the OECD released Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15%. The OECD continues to release additional guidance on the two-pillar framework with widespread implementation anticipated by 2024. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by individual countries. The legislation is anticipated to be effective for our fiscal year beginning April 1, 2024.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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