XML 38 R30.htm IDEA: XBRL DOCUMENT v3.25.2
Income Taxes
 3 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Tax

18. Income Tax

Tax regulations may require items to be included in our tax return at different times than when those items are reflected in our financial statements. Some of the differences are permanent, such as expenses that are not deductible on our tax return, and some are temporary differences, such as the timing of depreciation expense. Temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that will be used as a tax deduction or credit in our tax return in future years, which we have already recorded in our financial statements. Deferred tax liabilities generally represent deductions taken on our tax return that have not yet been recognized as an expense in our financial statements. We establish valuation allowances for our deferred tax assets if the amount of expected future taxable income is more likely than not to allow for the use of the deduction credit. Our effective tax rates for the quarters ended June 30, 2025 and June 30, 2024 was a provision of 23.2% and 23.8%, respectively. Such rates differed from the federal statutory rate of 21.0% primarily due to state and local income taxes for both periods.

The Canadian government issued draft Pillar Two legislation (Global Minimum Tax Act) on June 20, 2024. The Canadian legislation went into effect for our fiscal year beginning April 1, 2024. We have performed an assessment of the potential exposure to Pillar Two income taxes. Based on the assessment performed, we do not expect the Pillar Two rules to have an impact on the income tax provision or cash taxes. We will continue to evaluate such legislation.

Subsequent to June 30, 2025, the One Big Beautiful Bill Act ("OBBB") was enacted into law on July 4, 2025. OBBB extends the expiring tax provisions from the 2017 Tax Cuts and Jobs Act, reinstates immediate expensing of qualified business property and bonus depreciation and allows for full expensing of domestic research and experimental expenditures. We are currently evaluating the tax provisions of OBBB and the impact to our financial statements.