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Income Taxes | 12 Months Ended
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Mar. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income Before Income Taxes. Components of income before income taxes recorded in the consolidated statements of comprehensive income, were as follows:
| Years Ended March 31,
| 2021 |  | 2020 |  | 2019
Domestic* | $ | 368,328 |  |  | $ | 206,111 |  |  | $ | 181,730 |
Foreign | 133,186 |  |  | 134,755 |  |  | 147,204 |
Total | $ | 501,514 |  |  | $ | 340,866 |  |  | $ | 328,934 |
*Domestic income before income taxes for the years ended March 31, 2021, 2020, and 2019 is presented net of intercompany dividends of $175,000, $150,000, and $130,000, respectively. Income Tax Expense. Components of income tax expense (benefit) recorded in the consolidated statements of comprehensive income, were as follows:
| Years Ended March 31,
| 2021 |  | 2020 |  | 2019
Current |  |  |  |  |
Federal | $ | 93,562 |  |  | $ | 47,087 |  |  | $ | 33,334 |
State | 15,595 |  |  | 635 |  |  | 9,084 |
Foreign | 17,953 |  |  | 14,068 |  |  | 15,269 |
Total | 127,110 |  |  | 61,790 |  |  | 57,687 |
Deferred |  |  |  |  |
Federal | (6,717) |  |  | 4,626 |  |  | 6,612 |
State | (633) |  |  | (462) |  |  | 2,236 |
Foreign | (821) |  |  | (1,230) |  |  | (1,909) |
Total | (8,171) |  |  | 2,934 |  |  | 6,939 |
Total | $ | 118,939 |  |  | $ | 64,724 |  |  | $ | 64,626 |
Income Tax Expense Reconciliation. Income tax expense (benefit) differed from that obtained by applying the statutory federal income tax rate to income before income taxes, as follows:
| Years Ended March 31,
| 2021 |  | 2020 |  | 2019
Computed expected income taxes | $ | 105,318 |  |  | $ | 71,582 |  |  | $ | 69,076 |
State income taxes, net of federal income tax benefit | 16,479 |  |  | 11,042 |  |  | 9,329 |
Foreign rate differential | (15,507) |  |  | (17,966) |  |  | (20,105) |
Unrecognized tax benefits | 7,632 |  |  | 6,695 |  |  | 786 |
Dividends from previously taxed earnings | (5,313) |  |  | (4,584) |  |  | (4,257) |
Nondeductible executive compensation | 11,070 |  |  | 4,162 |  |  | 7,742 |
US tax on foreign earnings* | 4,252 |  |  | 2,343 |  |  | 5,848 |
Re-measurement of deferred taxes | — |  |  | — |  |  | (983) |
Tax audit settlements | 1,147 |  |  | (3,956) |  |  | — |
Employee share based compensation excess tax benefits | (6,846) |  |  | (2,477) |  |  | (1,445) |
Other | 707 |  |  | (2,117) |  |  | (1,365) |
Total | $ | 118,939 |  |  | $ | 64,724 |  |  | $ | 64,626 |
*These amounts represent global intangible low-taxed income (commonly referred to as GILTI) under the territorial tax system pursuant to the Tax Reform Act, net of foreign derived intangible income tax benefit. Due to the enactment of Tax Reform Act, the Company is subject to US taxation of its foreign subsidiary earnings considered global intangible low-taxed income, as well as limitations on the deductions of executive compensation, which are included in income tax expense in the consolidated statements of comprehensive income for the periods presented above. In accordance with the Securities Exchange Commission Staff Accounting Bulletin No. 118 (SAB 118), issued December 22, 2017, the Company completed its accounting for the material effects of the Tax Reform Act during the quarter ended December 31, 2018. In connection with finalizing the tax effects of the Tax Reform Act, the Company recorded immaterial measurement period adjustments during the year ended March 31, 2019 including a reduction from $59,114 to $57,895 related to the one-time mandatory deemed repatriation tax on accumulated foreign earnings. Refer to section below entitled “US Taxation of Foreign Earnings” for further information. The Company continues to evaluate new guidance and legislation as it is issued. In response to the pandemic, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27th, 2020 and the American Rescue Plan Act (ARP Act) was signed into law on March 10, 2021. This legislation made broad changes to the US tax code and the Company expects to see future regulatory and legislative guidance issued. The Company reviewed the provisions of the CARES Act and the ARP Act and considers the effect to be immaterial to its consolidated financial statements for the years ended March 31, 2021 and 2020. Deferred Taxes. The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities, are as follows:
| As of March 31,
| 2021 |  | 2020
Deferred tax assets |  |  |
Amortization and impairment of intangible assets | $ | 7,302 |  |  | $ | 11,471 |
Nonvested stock-based compensation | 7,138 |  |  | 5,194 |
Operating lease liability | 37,707 |  |  | 45,600 |
Uniform capitalization adjustment to inventory | 5,256 |  |  | 4,322 |
Bad debt allowance and other reserves | 19,321 |  |  | 14,243 |
| As of March 31,
| 2021 |  | 2020
Accrued bonuses | 8,491 |  |  | 6,187 |
Foreign currency translation | 646 |  |  | 645 |
Net operating loss carry-forwards, net of valuation allowances | 1,663 |  |  | 2,071 |
Other | 3,048 |  |  | 1,372 |
Gross deferred tax assets | 90,572 |  |  | 91,105 |
Valuation allowances | (1,197) |  |  | (1,519) |
Total | 89,375 |  |  | 89,586 |
Deferred tax liabilities |  |  |
Prepaid expenses | (3,829) |  |  | (4,252) |
Operating lease asset | (30,754) |  |  | (41,276) |
Depreciation of property and equipment | (17,598) |  |  | (15,825) |
Total | (52,181) |  |  | (61,353) |
Deferred tax assets, net | $ | 37,194 |  |  | $ | 28,233 |
In order to fully realize the deferred tax assets, the Company will need to generate future taxable income of $154,715. The deferred tax assets are primarily related to the Company’s domestic operations and are currently expected to be realized between fiscal years 2022 and 2031. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the net deferred tax assets. The Company’s deferred tax valuation allowances are primarily the result of foreign losses in jurisdictions with limited future profitability. US Taxation of Foreign Earnings. At March 31, 2019, the Company completed the calculation of the one-time transition tax on the deemed repatriation of foreign subsidiaries’ earnings pursuant to the Tax Reform Act and previously recorded a net cumulative tax expense of $57,895, net of foreign tax credits. Beginning with tax year ended March 31, 2018, an installment election was made to pay these taxes over eight years with 40% paid in equal installments over the first five years and the remaining 60% to be paid in installments of 15%, 20% and 25% in years six, seven and eight, respectively. The cumulative remaining balance as of March 31, 2021 was $41,452, with $2,586 recorded in income taxes payable and $38,866 in long-term income tax liability in the consolidated balance sheets. As of March 31, 2021, the Company reported $303,171 of undistributed earnings from its non-US subsidiaries, of which $180,951 relates to cash and cash equivalents, a portion of which may be subject to additional foreign withholding taxes if it were to be repatriated. As of March 31, 2021, the Company reported $13,019 of accumulated earnings from its non-US subsidiaries for which no US federal or state income taxes have been provided. The Company currently anticipates repatriating current and future unremitted earnings of non-US subsidiaries, to the extent they have been and will be subject to US income tax, as long as such cash is not required to fund ongoing foreign operations. Due to the complexities in the laws of foreign jurisdictions and assumptions that would have to be made, it is not practicable to estimate the amount of foreign withholding taxes associated with such unremitted earnings. During the year ended March 31, 2021, the Company declared a dividend of $175,000 from a foreign subsidiary, for which no foreign withholding taxes were required. Unrecognized Tax Benefits. When tax returns are filed, some positions taken are subject to uncertainty about the merits of the position taken or the amount that would be ultimately sustained upon examination. The benefit of a tax position is recorded in the consolidated financial statements in the period during which the Company believes it is more likely than not that the position will be sustained upon examination by taxing authorities. The recognition threshold is measured as the largest amount of tax benefit that is more than 50% likely to be realized upon settlement. The portion of the benefit that exceeds the amount measured, as described above, is recorded as a liability for unrecognized tax benefits, along with any associated interest and penalties, in the consolidated balance sheets. A reconciliation of the beginning and ending amounts of total gross unrecognized tax benefits, are as follows:
Balance, March 31, 2018 | $ | 9,594 |
Gross increase related to current fiscal year tax positions | 1,027 |
Gross increase related to prior fiscal year tax positions | 3,282 |
Settlements | (1,157) |
Lapse of statute of limitations | (1,804) |
Balance, March 31, 2019 | 10,942 |
Gross increase related to current fiscal year tax positions | 1,153 |
Gross increase related to prior fiscal year tax positions | 8,152 |
Settlements | (246) |
Lapse of statute of limitations | (2,363) |
Balance, March 31, 2020 | 17,638 |
Gross increase related to current fiscal year tax positions | 2,242 |
Gross increase related to prior fiscal year tax positions | 8,566 |
Gross decrease related to prior fiscal year tax positions | (1,215) |
Lapse of statute of limitations | (1,961) |
Balance, March 31, 2021 | $ | 25,270 |
Total gross unrecognized tax benefits recorded in the consolidated balance sheets, are as follows:
| As of March 31,
| 2021 |  | 2020
Long-term asset |  |  |
Deferred tax assets, net | $ | — |  |  | $ | 486 |
Current liability |  |  |
Income taxes payable | 1,038 |  |  | — |
Long-term liability |  |  |
Income tax liability | 24,232 |  |  | 17,152 |
Total | $ | 25,270 |  |  | $ | 17,638 |
As of March 31, 2021 and 2020, the Company had $4,782 and $3,631 accrued for the payment of interest and penalties, respectively, in income tax liability in the consolidated balance sheets. During the years ended March 31, 2021, 2020, and 2019, the Company recorded $1,151, $1,176, and $(110), respectively, of interest and penalties as an increase or (decrease) to interest expense in the consolidated statements of comprehensive income. Management believes it is reasonably possible that the amount of unrecognized tax benefits, as well as associated interest and penalties, may decrease during the next 12 months by $4,544 related primarily to the expiration of statute of limitations, partially offset by additional unrecognized tax benefits relating to current fiscal year tax return positions. Of this amount, $4,268 would result in an income tax benefit for the Company and $1,153 would result in a decrease to interest expense in the consolidated statements of comprehensive income. Net unrecognized tax benefits are defined as gross unrecognized tax benefits, less federal benefit for state income taxes, related to uncertain tax positions taken in the Company’s income tax return that would impact the Company’s effective tax rate, if recognized. Net unrecognized tax benefits of $23,883, $16,685, and $10,344 for the years ended March 31, 2021, 2020, and 2019, respectively, would reduce the annual effective tax rate recorded in the consolidated statements of comprehensive income. The Company has on-going income tax examinations in various state and foreign tax jurisdictions and regularly assesses tax positions taken in years open to examination. The Company files income tax returns in the US federal jurisdiction and various state, local, and foreign jurisdictions. With few exceptions, the Company is no longer subject to US federal, state, local, or foreign income tax examinations by tax authorities before fiscal year 2017. Although the Company believes its tax estimates are reasonable and prepares its tax filings in accordance with all applicable tax laws, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company’s estimates or from its historical income tax provisions and accruals. The results of an audit or litigation could have a material impact on results of operations or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, or interest assessments. However, it is the opinion of management that the Company does not currently expect these audits and inquiries to have a material impact on the Company’s consolidated financial statements.

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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