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INCOME TAXES
 12 Months Ended
Mar. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES

(J) Income Taxes

The provision for income taxes from continuing operations includes the following components:

 

 

 

For the Years Ended March 31,

 

 

 

2023

 

 

2022

 

 

2021

 

 

 

(dollars in thousands)

 

Current Provision

 

 

 

 

 

 

 

 

 

Federal

 

$

103,940

 

 

$

87,626

 

 

$

67,913

 

State

 

 

18,520

 

 

 

6,924

 

 

 

9,587

 

 

 

 

122,460

 

 

 

94,550

 

 

 

77,500

 

Deferred Provision (Benefit)

 

 

 

 

 

 

 

 

 

Federal

 

 

11,321

 

 

 

3,491

 

 

 

7,207

 

State

 

 

(6,728

)

 

 

2,806

 

 

 

5,239

 

 

 

 

4,593

 

 

 

6,297

 

 

 

12,446

 

Provision for Income Taxes

 

$

127,053

 

 

$

100,847

 

 

$

89,946

 

 

 

The effective tax rates vary from the federal statutory rates due to the following items:

 

 

 

For the Years Ended March 31,

 

 

 

2023

 

 

2022

 

 

2021

 

 

 

(dollars in thousands)

 

Earnings Before Income Taxes

 

$

588,593

 

 

$

475,094

 

 

$

424,112

 

Income Taxes at Statutory Rate

 

$

123,605

 

 

$

99,770

 

 

$

89,063

 

Increases (Decreases) in Tax Resulting from

 

 

 

 

 

 

 

 

 

State Income Taxes, net

 

 

16,821

 

 

 

12,743

 

 

 

11,713

 

Statutory Depletion in Excess of Cost

 

 

(8,253

)

 

 

(7,796

)

 

 

(5,263

)

Excess Tax Benefit from Stock Compensation

 

 

(1,593

)

 

 

(3,048

)

 

 

(3,229

)

Meals and Entertainment Disallowance

 

 

484

 

 

 

279

 

 

 

220

 

Limitation on Officer's Compensation

 

 

3,009

 

 

 

2,568

 

 

 

1,503

 

Valuation Allowance

 

 

(7,205

)

 

 

(4,556

)

 

 

300

 

Change in Reserves

 

 

—

 

 

 

—

 

 

 

(2,916

)

Other

 

 

185

 

 

 

887

 

 

 

(1,445

)

Provision for Income Taxes

 

$

127,053

 

 

$

100,847

 

 

$

89,946

 

Effective Tax Rate

 

 

22

%

 

 

21

%

 

 

21

%

 

Components of deferred income taxes are as follows:

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

 

(dollars in thousands)

 

Items Giving Rise to Deferred Tax Liabilities

 

 

 

 

 

 

Excess Tax Depreciation and Amortization

 

$

(253,541

)

 

$

(242,335

)

Investment in Joint Venture Basis Differences

 

 

(8,744

)

 

 

(7,813

)

Depletable Assets

 

 

(3,876

)

 

 

(3,769

)

Right-of-Use Assets

 

 

(5,202

)

 

 

(5,897

)

Inventory

 

 

(406

)

 

 

(548

)

Other

 

 

(2,908

)

 

 

(3,506

)

Total Deferred Tax Liabilities

 

$

(274,677

)

 

$

(263,868

)

Items Giving Rise to Deferred Tax Assets

 

 

 

 

 

 

Change in Accruals

 

$

12,886

 

 

$

13,255

 

Bad Debts

 

 

1,662

 

 

 

1,600

 

Long-term Incentive Compensation Plan

 

 

3,515

 

 

 

3,252

 

Credits and Other Carryforwards

 

 

12,995

 

 

 

12,747

 

Lease Liability

 

 

7,647

 

 

 

8,849

 

Pension

 

 

1,128

 

 

 

1,001

 

Subtotal

 

 

39,833

 

 

 

40,704

 

Valuation Allowance

 

 

(2,000

)

 

 

(9,205

)

Total Deferred Tax Assets

 

$

37,833

 

 

$

31,499

 

 

We record Deferred Tax Assets and Liabilities based upon estimates of their realizable value with such estimates based upon likely future tax consequences. In assessing the need for a Valuation Allowance, we consider both positive and negative evidence related to the likelihood of realization of the Deferred Tax Assets. If, based on the weight of available evidence, it is more likely than not that a Deferred Tax Asset will not be realized, we record a Valuation Allowance.

 

We have state net operating loss carryforwards of $2.3 million at March 31, 2023, compared with $0.9 million at March 31, 2022, net of Valuation Allowance. We have state income tax credit carryforwards of $10.7 million at March 31, 2023, compared with $4.3 million at March 31, 2022, net of Valuation Allowances. The state income tax credits may be carried forward indefinitely.

We file income tax returns in U.S. federal and various state jurisdictions. The Company is currently subject to U.S. federal income tax examinations for the year ended March 31, 2019 and forward.

Uncertain Tax Positions

We are subject to audit examinations at federal, state, and local levels by tax authorities in those jurisdictions who may challenge the treatment or reporting of any return item. The tax matters challenged by the tax authorities are typically complex; therefore, the ultimate outcome of these challenges is subject to uncertainty.

We review and assess all tax positions subject to uncertainty on a more-likely-than-not standard with respect to the ultimate outcome if challenged. We measure and record tax benefit or expense only when the more-likely-than-not threshold is met. The change in unrecognized tax benefits for the years ended March 31, 2023, 2022, and 2021 was as follows:

 

 

 

For the Years Ended March 31,

 

 

 

2023

 

 

2022

 

 

2021

 

 

 

(dollars in thousands)

 

Balance at Beginning of Year

 

$

1,284

 

 

$

1,284

 

 

$

4,200

 

Increase Related to Current Tax Positions

 

 

—

 

 

 

—

 

 

 

1,284

 

Decrease Related to Current Tax Positions

 

 

—

 

 

 

—

 

 

 

(4,200

)

Payments

 

 

—

 

 

 

—

 

 

 

—

 

 

 

$

1,284

 

 

$

1,284

 

 

$

1,284

 

 

We recorded a $4.2 million reserve resulting from of a position taken on our fiscal 2020 federal tax return, which is related to the interest limitation under IRC Section 163(j) and the resulting carryback allowed under the CARES Act. This tax return position reflected an expected update to U.S. Department of the Treasury regulations. During fiscal 2021, the U.S. Department of Treasury issued updated regulations under IRC Section 163(j). As a result, in fiscal 2021 we reversed the reserve recorded in fiscal 2020.

We classify interest and penalties related to uncertain tax positions as current income tax expense. We recorded no interest and penalties for each of the fiscal years ended March 31, 2023, 2022, and 2021.