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INCOME TAXES | 12 Months Ended
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Jun. 30, 2020
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 20. INCOME TAXES The Tax Cuts and Jobs Act (TCJA) was enacted on December 22, 2017. Among other things, the TCJA reduced the U.S. federal corporate tax rate from 35.0 percent to 21.0 percent effective on January 1, 2018. The domestic and foreign components of income before provision for income taxes are as follows (in thousands):
|  | Year Ended June 30, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Domestic |  | $ | 379,414 |  |  | $ | 308,922 |  |  | $ | 279,360 |
Foreign |  |  | 22,223 |  |  |  | 18,987 |  |  |  | 19,304 |
Income before income taxes |  | $ | 401,637 |  |  | $ | 327,909 |  |  | $ | 298,664 |
The components of income tax expense (benefit) are as follows (in thousands):
|  | Year Ended June 30, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 42,268 |  |  | $ | 41,675 |  |  | $ | 56,467 |
State and local |  |  | 14,744 |  |  |  | 17,606 |  |  |  | 13,006 |
Foreign |  |  | 5,271 |  |  |  | 4,033 |  |  |  | 5,344 |
Total current |  |  | 62,283 |  |  |  | 63,314 |  |  |  | 74,817 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 12,940 |  |  |  | (27 | ) |  |  | (80,395 | )
State and local |  |  | 5,465 |  |  |  | (877 | ) |  |  | 3,481 |
Foreign |  |  | (531 | ) |  |  | (105 | ) |  |  | (410 | )
Total deferred |  |  | 17,874 |  |  |  | (1,009 | ) |  |  | (77,324 | )
Total income tax expense (benefit) |  | $ | 80,157 |  |  | $ | 62,305 |  |  | $ | (2,507 | )
Income tax expense differs from the amounts computed by applying the U.S. federal statutory income tax rate as a result of the following (in thousands):
|  | Year Ended June 30, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Expected tax expense computed at federal statutory rate (1) |  | $ | 84,344 |  |  | $ | 68,861 |  |  | $ | 83,805 |
State and local taxes, net of federal benefit |  |  | 15,965 |  |  |  | 13,216 |  |  |  | 11,860 |
Nonincludible and nondeductible items, net |  |  | 3,133 |  |  |  | 1,971 |  |  |  | 1,832 |
Remeasurement of deferred taxes and transition tax |  |  | — |  |  |  | (2,182 | ) |  |  | (86,593 | )
Effect of foreign tax rates |  |  | (377 | ) |  |  | (380 | ) |  |  | (1,261 | )
R&D tax credit, net |  |  | (10,700 | ) |  |  | (6,755 | ) |  |  | (3,630 | )
Other tax credits |  |  | (1,183 | ) |  |  | (2,138 | ) |  |  | (2,102 | )
Stock-based compensation |  |  | (10,900 | ) |  |  | (7,493 | ) |  |  | (5,388 | )
Other |  |  | (125 | ) |  |  | (2,795 | ) |  |  | (1,030 | )
Total income tax expense (benefit) |  | $ | 80,157 |  |  | $ | 62,305 |  |  | $ | (2,507 | )
| (1) | The U.S. federal statutory income tax rate for FY2020 and FY2019 is 21.0 percent. The federal statutory rate for FY2018 was a blended rate of 28.06 percent due to the TCJA.
The tax effects of temporary differences that give rise to deferred taxes are presented below (in thousands):
|  | June 30, |
|  | 2020 |  |  | 2019 |
Deferred tax assets: |  |  |  |  |  |  |  |
Deferred compensation and post-retirement obligations |  | $ | 33,094 |  |  | $ | 29,206 |
Reserves and accruals |  |  | 41,137 |  |  |  | 30,205 |
Stock-based compensation |  |  | 9,860 |  |  |  | 9,881 |
Lease liability |  |  | 99,539 |  |  |  | — |
Interest rate swaps |  |  | 11,349 |  |  |  | 2,688 |
Other asset |  |  | 6,786 |  |  |  | 9,392 |
Total deferred tax assets |  |  | 201,765 |  |  |  | 81,372 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Goodwill and other intangible assets |  |  | (273,088 | ) |  |  | (257,762 | )
Unbilled revenue |  |  | (17,429 | ) |  |  | (17,640 | )
Prepaid expenses |  |  | (6,444 | ) |  |  | (2,974 | )
Right of use assets |  |  | (85,275 | ) |  |  | — |
Property and equipment |  |  | (32,625 | ) |  |  | (8,335 | )
Total deferred tax liabilities |  |  | (414,861 | ) |  |  | (286,711 | )
Net deferred tax liability |  | $ | (213,096 | ) |  | $ | (205,339 | )
The Company is subject to income taxes in the U.S. and various state and foreign jurisdictions. Tax statutes and regulations within each jurisdiction are subject to interpretation and require the application of significant judgment. The Company is currently under examination by the Internal Revenue Service for year 2015; one state jurisdiction for years 2016 through 2018; and one state jurisdiction for years 2016 and 2017. The Company does not expect the resolution of these examinations to have a material impact on its results of operations, financial condition or cash flows. The effective income tax rate in FY2020, FY2019, and FY2018, was 20.0 percent, 19.0 percent, and (0.8) percent, respectively. The effective income tax rate increased in FY2020 primarily as a result of pretax book income increasing more than favorable credits and permanent items. In each period, the effective income tax rate was favorably affected by excess tax benefits from employee stock-based payment awards as well as a benefit from the research and development tax credit. U.S. income taxes have not been provided for undistributed earnings of foreign subsidiaries that have been permanently reinvested outside the United States. As of June 30, 2020, the estimated deferred tax liability associated with these undistributed earnings is approximately $1.4 million. The Company’s total liability for unrecognized tax benefits as of June 30, 2020, 2019 and 2018 was approximately $8.8 million, $1.5 million and $4.1 million, respectively. Any amount, if recognized, would positively impact the Company’s effective tax rate. A reconciliation of the beginning and ending amount of unrecognized benefits is shown in the table below (in thousands):
|  | Year Ended June 30, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Beginning of year |  | $ | 1,530 |  |  | $ | 4,122 |  |  | $ | 1,639 |
Additions based on current year tax positions |  |  | 2,293 |  |  |  | 676 |  |  |  | 2,483 |
Lapse of statute of limitations |  |  | — |  |  |  | (164 | ) |  |  | — |
Additions based on prior year tax positions |  |  | 5,003 |  |  |  | — |  |  |  | — |
Reductions based on prior tax year positions |  |  | — |  |  |  | (3,104 | ) |  |  | — |
End of year |  | $ | 8,826 |  |  | $ | 1,530 |  |  | $ | 4,122 |
The Company recognizes net interest and penalties as a component of income tax expense. Over the next 12 months, the Company does not expect a significant increase or decrease in the unrecognized tax benefits recorded at June 30, 2020. As of June 30, 2020, the entire balance of unrecognized tax benefits is included in other long-term liabilities.

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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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