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INCOME TAX
 12 Months Ended
Aug. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAX
NOTE 12. INCOME TAX

The components of earnings before income taxes were as follows:
 Year Ended August 31,
(in thousands)202320222021
United States$1,095,099 $1,197,769 $413,616 
Foreign26,868 317,378 120,402 
Total$1,121,967 $1,515,147 $534,018 
The income taxes (benefit) included in the consolidated statements of earnings were as follows:
 Year Ended August 31,
(in thousands)202320222021
Current:   
United States$168,399 $122,334 $113,696 
Foreign6,089 63,912 25,642 
State and local32,916 20,228 19,458 
Current taxes207,404 206,474 158,796 
Deferred:   
United States46,008 81,162 (10,563)
Foreign(847)(3,388)(2,512)
State and local9,642 13,637 (24,568)
Deferred taxes54,803 91,411 (37,643)
Total income taxes$262,207 $297,885 $121,153 

A reconciliation of the federal statutory rate to the Company's effective income tax rate, including material items impacting the effective income tax rate, is as follows:
 Year Ended August 31,
(in thousands)202320222021
Income tax expense at statutory rate$235,613$318,181$112,144
State and local taxes (1)(2)
33,62126,753(3,838)
Research and development credit(2)
(7,986)(13,102)(1,289)
Foreign tax impairment on valuation of subsidiaries (3)
(7,334)—(29,866)
Change in valuation allowance6,471(447)37,092
Global intangible low-taxed income (4)(5)
(1,967)68517,263
Capital loss(6)
—(34,736)—
Nontaxable foreign interest (3)
—3(14,617)
Other3,7895484,264
Income tax expense$262,207$297,885$121,153
Effective income tax rate23.4 %19.7 %22.7 %
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(1) State and local taxes in 2021 includes a $19.9 million benefit related to the release of certain state valuation allowances.
(2) 2023 and 2022 include impacts of uncertain tax positions.
(3) Fully offset by a valuation allowance.
(4) Amounts are net of adjustments resulting from differences between prior year estimates and amounts included in tax returns.
(5) 2021 includes the tax effect of a gain recognized in connection with a global tax restructuring.
(6) Resulted from a tax restructuring transaction.

The Company plans to repatriate the current and future earnings from material jurisdictions within the Europe segment and recorded an immaterial amount of tax expense related to such future distributions. The Company considers all undistributed earnings of its non-U.S. subsidiaries prior to August 31, 2019 to be indefinitely reinvested and has not recorded deferred tax liabilities on such earnings.
The income tax effects of significant temporary differences giving rise to deferred tax assets and liabilities were as follows:
 August 31,
(in thousands)20232022
Deferred tax assets:  
Net operating losses and credits$298,624 $300,787 
Capitalized research and development45,669 — 
ROU operating lease liabilities39,984 33,398 
Deferred compensation and employee benefits33,491 39,095 
Reserves and other accrued expenses16,510 11,730 
Other21,750 17,253 
Total deferred tax assets456,028 402,263 
Valuation allowance for deferred tax assets(280,463)(268,547)
Deferred tax assets, net175,565 133,716 
Deferred tax liabilities:  
Property, plant and equipment(351,900)(261,638)
Intangible assets(44,168)(48,558)
ROU operating lease assets(38,801)(32,444)
Derivatives(35,992)(27,324)
Other(11,453)(14,054)
Total deferred tax liabilities(482,314)(384,018)
Net deferred tax liabilities$(306,749)$(250,302)

Net operating losses giving rise to deferred tax assets consist of $348.4 million of state net operating losses, $21.3 million of U.S. federal net operating losses and $946.6 million of foreign net operating losses that expire in varying amounts beginning in 2024 (with certain amounts having indefinite carryforward periods). These assets will be reduced as income tax expense is recognized in future periods.

The Company maintains a valuation allowance to reduce certain deferred tax assets to amounts that are more likely than not to be realized. The Company's valuation allowances primarily relate to net operating loss and credit carryforwards in certain state and foreign jurisdictions for which utilization is uncertain.

A reconciliation of the beginning and ending amounts of unrecognized income tax benefits is as follows:
(in thousands)202320222021
Balance at September 1,$29,747 $5,531 $8,652 
Change for tax positions of current year14,792 17,461 — 
Change for tax positions of prior years(374)6,755 — 
Reductions due to lapse of statute of limitations— — (3,121)
Balance at August 31, (1)
$44,165 $29,747 $5,531 
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(1) The full balance of unrecognized income tax benefits in each year, if recognized, would have impacted the Company’s effective income tax rate at the end of each respective year.

Accrued interest and penalties related to uncertain tax positions were not material in any period presented.

The Company files income tax returns in the U.S. and multiple foreign jurisdictions with varying statutes of limitations. In the normal course of business, the Company and its subsidiaries are subject to examination by various taxing authorities. The following is a summary of all fiscal years that are open to examination.

U.S. Federal — 2020 and forward
U.S. States — 2019 and forward
Foreign — 2018 and forward