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Income Taxes | 12 Months Ended
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Sep. 30, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES
Table 11.1: Components of Provision for Income Taxes
| For the Year Ended September 30,
| 2022 |  | 2021 |  | 2020
| (in thousands)
Current provision/(benefit): |  |  |  |  |
Federal | $ | 45,042 |  |  | $ | 62,062 |  |  | $ | 65,735 |
State and local | 15,371 |  |  | 20,077 |  |  | 28,117 |
Foreign | 2,653 |  |  | 16,919 |  |  | (2,154) |
Total current provision for income taxes | 63,066 |  |  | 99,058 |  |  | 91,698 |
Deferred tax expense/(benefit): |  |  |  |  |
Federal | 7,107 |  |  | (2,527) |  |  | (12,984) |
State and local | 2,130 |  |  | (590) |  |  | (4,246) |
Foreign | 967 |  |  | (3,460) |  |  | (1,915) |
Total deferred tax expense/(benefit) | 10,204 |  |  | (6,577) |  |  | (19,145) |
Provision for income taxes | $ | 73,270 |  |  | $ | 92,481 |  |  | $ | 72,553 |
Table 11.2: Components of Income before Provision for Income Taxes by Country
| For the Year Ended September 30,
| 2022 |  | 2021 |  | 2020
| (in thousands)
Domestic | $ | 274,641 |  |  | $ | 339,647 |  |  | $ | 304,240 |
Foreign | 2,457 |  |  | 44,034 |  |  | (17,178) |
Income before provision for income taxes | $ | 277,098 |  |  | $ | 383,681 |  |  | $ | 287,062 |
Table 11.3: Reconciliation of Tax Expense at Statutory Rate to Actual Tax Expense
| For the Year Ended September 30,
| 2022 |  | 2021 |  | 2020
| (dollars in thousands)
Tax expense at statutory rate | $ | 58,190 |  |  | $ | 80,573 |  |  | $ | 60,284 |
Increase/(decrease) due to: |  |  |  |  |
State income taxes, net of federal benefit | 14,244 |  |  | 18,350 |  |  | 17,480 |
Foreign taxation rate differentials | (709) |  |  | 4,212 |  |  | (463) |
Non-deductible expenses | 882 |  |  | 2,254 |  |  | 2,200 |
Valuation allowance - foreign jurisdictions | 4,875 |  |  | 2,285 |  |  | 916 |
Tax credits | (5,239) |  |  | (5,072) |  |  | (4,149) |
Excess tax expense/(benefits) from stock-based compensation | 1,143 |  |  | (6,008) |  |  | (2,038) |
Other | (116) |  |  | (4,113) |  |  | (1,677) |
Income tax expense | $ | 73,270 |  |  | $ | 92,481 |  |  | $ | 72,553 |
U.S Federal Statutory tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Effective tax rate | 26.4 | % |  | 24.1 | % |  | 25.3 | %
Table 11.4: Components of Deferred Tax Assets and Liabilities
| As of September 30,
| 2022 |  | 2021
| (in thousands)
Deferred tax assets/(liabilities): |  |  |
Costs deductible in future periods | $ | 36,604 |  |  | $ | 28,921 |
Deferred revenue | 7,273 |  |  | 7,878 |
Stock compensation | 4,918 |  |  | 3,679 |
Capital loss carryforward | 2,391 |  |  | — |
Net operating loss carryforwards | 6,666 |  |  | 3,618 |
Amortization of goodwill and intangibles | (198,903) |  |  | (203,094) |
Capitalized software | (15,445) |  |  | (11,343) |
Accounts receivable - unbilled | (12,087) |  |  | (15,317) |
Property and equipment | (2,577) |  |  | (910) |
Prepaid expenses | (11,522) |  |  | (7,913) |
Financial instruments | (8,261) |  |  | 107 |
Valuation allowance | (8,075) |  |  | (3,200) |
Other | (2,111) |  |  | 3,926 |
Net deferred tax liability | $ | (201,129) |  |  | $ | (193,648) |
Our deferred tax assets and liabilities are held in various national and international jurisdictions that do not allow right of offset. Accordingly, our presentation of deferred taxes on our consolidated balance sheets is split between jurisdictions that show a net deferred tax asset and a net deferred tax liability.
Table 11.5: Deferred Tax Assets and Liabilities By Jurisdiction Positions
| As of September 30,
| 2022 |  | 2021
| (in thousands)
Total of tax jurisdictions with net deferred tax assets | $ | 4,970 |  |  | $ | 990 |
Total of tax jurisdictions with net deferred tax liabilities | (206,099) |  |  | (194,638) |
Net deferred tax liabilities | $ | (201,129) |  |  | $ | (193,648) |
We consider our foreign earnings in excess of the earnings subject to the one-time transition tax to be indefinitely reinvested outside of the U.S. in accordance with the relevant accounting guidance for income taxes. Accordingly, no U.S. deferred taxes were recorded with respect to such earnings. As of September 30, 2022, our foreign subsidiaries held approximately $37.2 million of cash and cash equivalents in either U.S. Dollars or local currencies. The provision for income taxes includes all provision to return adjustments included in the year recognized in the financial statements. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is "more-likely-than-not" that the position will be sustained upon examination. The total amount of unrecognized tax benefits that, if recognized, would affect our annual effective income tax rate was $7.3 million and $12.6 million at September 30, 2022 and 2021, respectively. We report interest and penalties as a component of income tax expense. We recognized interest expense relating to unrecognized tax benefits of $0.1 million for each of the years ended September 30, 2021, and 2020, respectively, with no comparative amounts in fiscal year 2022. The net liability balance at September 30, 2021, includes approximately $2.1 million and less than $0.1 million of interest and penalties, respectively, with no comparative amounts at September 30, 2022. We recognize and present uncertain tax positions on a gross basis (i.e., without regard to likely offsets for deferred tax assets, deductions and/or credits that would result from payment of uncertain tax amounts).
Table 11.6: Reconciliation of the Beginning and Ending Amounts of Potential Tax Benefits
| For the Year Ended September 30,
| 2022 |  | 2021 |  | 2020
| (in thousands)
Balance at beginning of year | $ | 12,642 |  |  | $ | 1,798 |  |  | $ | 3,001 |
Additions for acquired unrecognized tax benefits | — |  |  | 11,244 |  |  | — |
Decreases for lapse of statue of limitations | (1,412) |  |  | — |  |  | — |
Decreases for settlements with taxing authorities | (4,785) |  |  | — |  |  | — |
Increases for tax positions taken in current year | 2,231 |  |  | 300 |  |  | 770 |
Decreases for tax positions taken in current year | — |  |  | (700) |  |  | (1,973) |
Balance at end of year | $ | 8,676 |  |  | $ | 12,642 |  |  | $ | 1,798 |
We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are no longer subject to federal income tax examinations for years before 2019 and to state and local income tax examinations by tax authorities for years before 2017. In international jurisdictions, similar rules apply to filed income tax returns, although the tax examination limitations and requirements may vary. We are no longer subject to audit by tax authorities for foreign jurisdictions for years prior to 2018.

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