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Provision for Taxes | 12 Months Ended
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Mar. 31, 2021
Disclosure Text Block [Abstract] |
Provision for Taxes | Note 14. Provision for Taxes Earnings before taxes and the provision for taxes consisted of the following: Years Ended March 31, 2021 2020 2019 (In thousands) Pretax earnings: U.S. $ 773,030 $ 372,687 $ 466,175 Non-U.S. 23,628 5,437 11,354 Total pretax earnings $ 796,658 $ 378,124 $ 477,529 Current provision (benefit) Federal $ 100,521 $ (373,817) $ (6,114) State 16,572 (9,600) 3,420 Non-U.S. 3,404 949 1,375 120,497 (382,468) (1,319) Deferred provision (benefit) Federal 53,957 307,846 94,961 State 9,795 9,728 11,311 Non-U.S. 1,553 970 1,719 65,305 318,544 107,991 Provision for income tax expense (benefit) $ 185,802 $ (63,924) $ 106,672 Income taxes paid (net of income tax refunds received) $ 29,044 $ 6,859 $ 4,255 F- 27 amerco and consolidated subsidiaries notes to consolidated financial statements - (continued) The difference between the tax provision at the statutory federal income tax rate and the tax provision attributable to income before taxes was as follows: Years Ended March 31, 2021 2020 2019 (In percentages) Statutory federal income tax rate 21.00 % 21.00 % 21.00 % Increase (reduction) in rate resulting from: NOL tax rate benefit - % (38.62) % - % State taxes, net of federal benefit 2.53 % 0.02 % 2.41 % Foreign rate differential - % 0.21 % 0.15 % Federal tax credits (0.99) % (0.53) % (0.15) % Transition tax - % - % (0.20) % Tax-exempt income (0.08) % (0.17) % - % Dividend received deduction (0.01) % (0.01) % (0.01) % Other 0.87 % 1.19 % (0.86) % Actual tax expense (benefit) of operations 23.32 % (16.91) % 22.34 % Significant components of our deferred tax assets and liabilities were as follows: March 31, 2021 2020 Deferred tax assets: (In thousands) Net operating loss and credit carry forwards $ 30,432 $ 25,973 Accrued expenses 109,740 105,171 Policy benefit and losses, claims and loss expenses payable, net 26,799 20,189 Operating leases 19,370 22,353 Total deferred tax assets $ 186,341 $ 173,686 Deferred tax liabilities: Property, plant and equipment $ 1,280,703 $ 1,198,198 Operating leases 19,370 22,353 Deferred policy acquisition costs 13,696 12,795 Unrealized gains 48,667 29,873 Other 2,394 4,010 Total deferred tax liabilities 1,364,830 1,267,229 Net deferred tax liability $ 1,178,489 $ 1,093,543 On March 27, 2020, President Trump signed into U.S. federal law the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which was aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the novel coronavirus (“COVID-19“) global pandemic and generally supporting the U.S. economy. Among other things, the CARES Act includes provisions relating to net operating loss (“NOL”) carryback periods, alternative minimum tax (“AMT”) credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. In particular, the CARES Act allows for NOLs generated in 2018, 2019, or 2020 to be carried back 5 years. As a result, the NOL and credit carry-forwards in the above table are primarily attributable to state NOLs. Federal NOLs from fiscal years 2018, 2019 and 2020 have been carried back to prior tax years as provided by the CARES Act. The statutory tax rate for the carryback years was 35% as compared to 21% at present. Consequently, we recognized a benefit amount of $ 146.0 million for fiscal year 2020. As of March 31, 2021 and March 31, 2020, AMERCO had state NOLs of $ 384.9 million and $ 337.3 million, respectively, that will begin to expire March 31, 2022, if not utilized. F- 28 amerco and consolidated subsidiaries notes to consolidated financial statements - (continued) On March 3, 2021, the IRS notifiied us that our federal inome tax returns for the tax years March 31, 2014, 2015, 2016, 2018 and 2019 were selected for examination. The IRS agent in charged confirmed that this is a limited scope examination arising out of NOL carryback claims and is a standard procedure for the IRS to process the refund. As such, the scope of the exam is expected to be limited to the items reported on Forms 1139 and related schedules only. As of now, we are still working with the IRS agent and there is no audit adjustment for any of the above tax periods. As of December 31, 2017, the Company elected to reclassify the income tax effects of the the 2017 Tax Cuts and Jobs Act (the “Tax Reform Act“) as enacted on December 22, 2017 from AOCI to retained earnings under ASU 2018-02. In addition, the Company has adopted the "investment by investment" approach as our accounting policy with regard to releasing disproportionate income tax effects from AOCI. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the transition tax and additional outside basis difference in these entities (i.e., basis difference in excess of that subject to the one-time transition tax) is not practicable. The Company accounts for uncertainty in income taxes by recognizing the tax benefit or expense from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The Company measures the tax benefits and expenses recognized in the consolidated financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. A reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period are as follows: Unrecognized Tax Benefits March 31, 2021 2020 (In thousands) Unrecognized tax benefits beginning balance $ 29,632 $ 37,201 Revaluation based on change in after tax benefit - - Additions based on tax positions related to the current year 1,479 42 Reductions for tax positions of prior years (42) (7,606) Settlements - (5) Unrecognized tax benefits ending balance $ 31,069 $ 29,632 We recognize interest related to unrecognized tax benefits as interest expense, and penalties as income tax expenses. At March 31, 2021 and 2020, the amount of interest accrued on unrecognized tax benefits was $ 14.3 million and $ 12.8 million, net of tax. During the current year we recorded expense from interest in the amount of $ 1.5 million, net of tax. We file income tax returns in the U.S. federal jurisdiction, and various states and Canadian jurisdictions. While the Company has ongoing audits in Canada and various state jurisdictions, there have been no proposed or anticipated adjustments that would materially impact the financial statements. With some exceptions, we are no longer subject to audit for years prior to the fiscal year ended March 31, 2018. F- 29

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