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Income Taxes
 12 Months Ended
Jun. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
We file a consolidated federal income tax return. Taxes based on income for the years ended June 30 have been provided as follows:
202420232022
Currently payable:
Federal$51,687 $20,147 $19,751 
State and local5,485 3,978 1,974 
Total current provision57,172 24,125 21,725 
Deferred federal, state and local (benefit) provision(10,270)7,886 1,077 
Total taxes based on income$46,902 $32,011 $22,802 
For the years ended June 30, our effective tax rate varied from the statutory federal income tax rate as a result of the following factors:
202420232022
Statutory rate21.0 %21.0 %21.0 %
State and local income taxes1.9 2.4 0.7 
Research and development tax credit(0.7)(1.1)(1.7)
Net windfall tax benefits - stock-based compensation— (0.4)(0.1)
Other0.6 0.4 0.4 
Effective rate22.8 %22.3 %20.3 %
Our net deferred tax liability for all periods presented has been classified as noncurrent. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at June 30 were comprised of:
20242023
Deferred tax assets:
Operating lease liabilities$12,245 $5,613 
Section 174 research and development capitalization11,910 4,281 
Employee medical and other benefits8,431 7,561 
Receivables4,202 3,042 
Inventories3,688 4,143 
Intangible assets2,185 1,426 
Other accrued liabilities1,161 1,600 
Total deferred tax assets43,822 27,666 
Deferred tax liabilities:
Property, plant and equipment(49,053)(50,106)
Goodwill(19,571)(19,070)
Operating lease right-of-use assets(12,474)(5,815)
Total deferred tax liabilities(81,098)(74,991)
Net deferred tax liability$(37,276)$(47,325)
Prepaid federal income taxes of $0.8 million and $3.3 million were included in Other Current Assets at June 30, 2024 and 2023, respectively. Accrued state and local income taxes of $0.3 million were included in Accrued Liabilities at June 30, 2024. Prepaid state and local income taxes of $0.8 million were included in Other Current Assets at June 30, 2023.
Net cash payments for income taxes for each of the years ended June 30 were as follows:
202420232022
Net cash payments for income taxes$53,583 $26,327 $17,827 
The gross tax contingency reserve at June 30, 2024 was $0.8 million and consisted of estimated tax liabilities of $0.3 million and interest and penalties of $0.5 million. The unrecognized tax benefits recorded as the gross tax contingency reserve noted in the following table for June 30, 2024 and 2023 would affect our effective tax rate, if recognized.
The following table sets forth changes in our total gross tax contingency reserve (including interest and penalties):
20242023
Balance, beginning of year$858 $925 
Tax positions related to the current year:
Additions— — 
Reductions— — 
Tax positions related to prior years:
Additions34 39 
Reductions(90)(106)
Settlements— — 
Balance, end of year$802 $858 
We have not classified any of the gross tax contingency reserve at June 30, 2024 in Accrued Liabilities as none of these amounts are expected to be resolved within the next 12 months. Consequently, the entire liability of $0.8 million was included in Other Noncurrent Liabilities. We expect that the amount of these liabilities will change within the next 12 months; however, we do not expect the change to have a significant effect on our financial position or results of operations.
We recognize interest and penalties related to these tax liabilities in income tax expense. For each of the years ended June 30, we recognized the change in the accrual for net tax-related interest and penalties as follows:
20242023
Benefit recognized for net tax-related interest and penalties$(10)$(13)
We had accrued interest and penalties at June 30 as follows:
20242023
Accrued interest and penalties included in the gross tax contingency reserve$484 $494 
We file federal and various state and local income tax returns in the United States. With limited exceptions, we are no longer subject to examination of U.S. federal or state and local income taxes for years prior to 2021.