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Income Taxes
 12 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The reconciliation of the provision for income taxes to the amount computed by applying the U.S. federal statutory tax rate to earnings before income taxes is as follows:
202320222021
Earnings before income taxes:
Domestic$136,080 $151,870 $141,665 
Foreign79,972 51,109 62,109 
Total$216,052 $202,979 $203,774 
Federal statutory income tax rate21.0 %21.0 %21.0 %
Increase (decrease) in income taxes resulting from:
Impacts of Tax Act(0.8)%(0.4)%(1.2)%
Revaluation of deferred taxes— %— %1.6 %
Withholding taxes0.4 %0.6 %0.4 %
Reversal of indefinite reinvestment assertion0.5 %— %0.2 %
R&D and foreign tax credits(6.4)%(5.4)%(4.6)%
Divestiture impacts— %2.3 %— %
Foreign tax rates6.8 %4.5 %4.4 %
Equity-based compensation (0.3)%(0.2)%(0.1)%
Change in valuation allowance for deferred taxes(0.8)%(2.3)%(1.6)%
State taxes, net of federal benefit0.1 %1.9 %2.1 %
Other0.3 %1.6 %0.6 %
Effective income tax rate20.8 %23.6 %22.8 %
Our accounting policy is to treat tax on the Global Intangible Low-Tax Income ("GILTI") as a current period cost included in tax expense the year incurred. As such, we don't measure the impact of the GILTI in our determination of deferred taxes. In 2023, we recorded $1,578 of GILTI tax and received a benefit of $3,159 related to the Foreign-Derived Intangible Income deduction. In 2023, we also recorded a tax benefit for provision to return adjustments of $2,338 primarily related to domestic research and development tax credits. In addition, we recorded a current year expense of $2,201 for a total accrual of $10,535 for taxes on undistributed earnings not considered permanently reinvested.
During 2023, 2022 and 2021, we repatriated available unremitted earnings from various foreign subsidiaries that were previously taxed under the Tax Act of $39,156, $37,986 and $41,987, respectively. We no longer indefinitely reinvest unremitted earnings and therefore we record a liability related to the remaining unremitted earnings generated by the foreign subsidiaries in the current year. We continue to be permanently invested in outside basis differences other than the unremitted earnings as we have no plans to liquidate or sell those foreign subsidiaries.
The components of income taxes are as follows:
202320222021
Current:
Federal$41,714 $6,270 $9,907 
Foreign32,269 26,730 23,801 
State6,602 3,063 4,684 
Total current80,585 36,063 38,392 
Deferred:
Federal(30,756)8,076 4,625 
Foreign629 1,742 2,898 
State(5,404)1,921 639 
Total deferred(35,531)11,739 8,162 
Income taxes$45,054 $47,802 $46,554 
Realization of deferred tax assets is dependent, in part, upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers projected future taxable income, tax planning strategies, carryback opportunities and reversal of existing deferred tax liabilities in making its assessment of the recoverability of deferred tax assets.
The tax effects of temporary differences that generated deferred tax assets and liabilities are as follows:
September 30,
2023		October 1,
2022
Deferred tax assets:
Benefit accruals$59,738 $65,863 
Inventory reserves28,301 30,053 
Tax benefit carryforwards7,897 10,885 
Contract reserves not currently deductible10,467 10,447 
Lease liability16,342 18,473 
Research and development41,118 — 
Other accrued expenses6,212 14,824 
Total gross deferred tax assets170,075 150,545 
Less valuation allowance(6,430)(8,650)
Total net deferred tax assets$163,645 $141,895 
Deferred tax liabilities:
Differences in bases and depreciation of property, plant and equipment$170,284 $167,990 
Pension22,238 28,802 
Total gross deferred tax liabilities192,522 196,792 
Net deferred tax liabilities$(28,877)$(54,897)
Deferred tax assets and liabilities are reported in separate captions on the Consolidated Balance Sheets.
At September 30, 2023, foreign tax loss carryforwards total $1,452 with expirations ranging from 2024 to 2028. We have $895 of federal tax credit carryforward with expirations of 2031 and 2033 and $6,285 state tax credit carryforward with expirations of 2027 to indefinite life. The change in the valuation allowance relates to tax benefit carryforwards that were utilized or expired during 2023 and credits that were generated in 2023 but will likely not be used before expiration.
Effective for tax year ended September 30, 2023, the Tax Cuts and Jobs Act (TCJA) of 2017 requires taxpayers to capitalize and amortize research and development costs pursuant to IRC Section 174. Domestic expenses are amortized over a 5 year period and foreign over a 15 year period. As a result of the act, a deferred tax asset of $41,118 was established in 2023.
We record unrecognized tax benefits as liabilities and we adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Further, we record interest and penalties related to unrecognized tax benefits in income tax expense. In 2023, we recorded a $1,072 benefit for the reversal of the uncertain tax position as a result of concluding the benefit is likely to be realized. In 2022, we expensed interest and penalties of $43 related to $848 of unrecognized tax benefits.
We are subject to income taxes in the U.S. and in various states and foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require the application of significant judgment. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities in significant jurisdictions for tax years before 2020. The statute of limitations in several jurisdictions will expire in the next twelve months and we will have no unrecognized tax benefits recognized if the statute of limitations expires without the relevant taxing authority examining the applicable returns.