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Provision for Taxes | 12 Months Ended
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Mar. 31, 2022
Disclosure Text Block [Abstract] |
Provision for Taxes | Note 13. Provision for Taxes Earnings before taxes and the provision for taxes consisted of the following: Years Ended March 31, 2022 2021 2020 (In thousands) Pretax earnings: U.S. $ 1,431,155 $ 773,030 $ 372,687 Non-U.S. 44,342 23,628 5,437 Total pretax earnings $ 1,475,497 $ 796,658 $ 378,124 Current provision (benefit) Federal $ 189,488 $ 100,521 $ (373,817) State 55,518 16,572 (9,600) Non-U.S. 6,893 3,404 949 251,899 120,497 (382,468) Deferred provision (benefit) Federal 90,852 53,957 307,846 State 6,355 9,795 9,728 Non-U.S. 3,105 1,553 970 100,312 65,305 318,544 Provision for income tax expense (benefit) $ 352,211 $ 185,802 $ (63,924) Income taxes paid (net of income tax refunds received) $ ( 4,548 ) $ 29,044 $ 6,859 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, 2022 2021 2020 (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 3.24 % 2.53 % 0.02 % Foreign rate differential 0.05 % – % 0.21 % Federal tax credits (0.19) % (0.99) % (0.53) % Transition tax – % – % – % Tax-exempt income (0.03) % (0.08) % (0.17) % Dividend received deduction – % (0.01) % (0.01) % Other (0.20) % 0.87 % 1.19 % Actual tax expense (benefit) of operations 23.87 % 23.32 % ( 16.91 ) % Significant components of our deferred tax assets and liabilities were as follows: March 31, 2022 2021 Deferred tax assets: (In thousands) Net operating loss and credit carry forwards $ 36,367 $ 30,432 Accrued expenses 114,152 109,740 Policy benefit and losses, claims and loss expenses payable, net 30,572 26,799 Operating leases 15,540 19,370 Total deferred tax assets $ 196,631 $ 186,341 Deferred tax liabilities: Property, plant and equipment $ 1,395,216 $ 1,280,703 Operating leases 15,540 19,370 Deferred policy acquisition costs 12,962 13,696 Unrealized gains 36,299 48,667 Other 1,972 2,394 Total deferred tax liabilities 1,461,989 1,364,830 Net deferred tax liability $ 1,265,358 $ 1,178,489 On March 27, 2020, former 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 COVID-19 global pandemic and generally supporting the U.S. economy. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, 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, we filed applicable forms with the IRS to carryback net operating losses. 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. These refund claims total approximately $ 366 million, of which we have received approximately $ 243 million in fiscal 2022 and are reflected in Prepaid expense. As refunds are received, they will reduce this amount. We have estimated and recorded the overall effects of the CARES Act and do not anticipate a material change. As a result, the NOL and credit carry-forwards in the above table are primarily attributable to state NOLs. As of March 31, 2022 and March 31, 2021, AMERCO had state NOLs of $ 458.5 million and $ 384.9 million, respectively, that will begin to expire March 31, 2023, if not utilized. 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. 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, 2022 2021 (In thousands) Unrecognized tax benefits beginning balance $ 31,069 $ 29,632 Revaluation based on change in after tax benefit – – Additions based on tax positions related to the current year 8,257 1,479 Reductions for tax positions of prior years – (42) Additions for tax provisions of prior years 9,525 – Unrecognized tax benefits ending balance $ 48,851 $ 31,069 We recognize interest related to unrecognized tax benefits as interest expense, and penalties as income tax expenses. As of March 31, 2022 and 2021, the amount of interest accrued on unrecognized tax benefits was $ 15.7 million and $ 14.3 million, net of tax. During the current year we recorded expense from interest in the amount of $ 1.4 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, 2019.

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