XML 31 R20.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes
3 Months Ended
Nov. 30, 2017
Income Taxes

Note 12.  Income Taxes



The Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter.



The provision for income taxes was 23.7% and 28.3% of income before income taxes for the three months ended November 30, 2017 and 2016, respectively. The decrease in the effective income tax rate from period to period was driven by the adoption of ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting” which resulted in excess tax benefits from settlements of stock-based equity awards being recognized in the provision for income taxes, whereas such benefits were recognized as an increase to additional paid-in capital in prior periods. See “Recently Adopted Accounting Standards” within Note 2Basis of Presentation and Summary of Significant Accounting Policies, included in this report, for additional information on the impact of this accounting change on the Company’s consolidated financial statements and related disclosures.



The Company is subject to taxation in the U.S. and in various state and foreign jurisdictions. Due to expired statutes and prior audit examinations, the Company’s federal income tax returns for years prior to fiscal year 2016 are not subject to examination by the U.S. Internal Revenue Service. The Company is also currently under audit in various state and international jurisdictions for fiscal years 2013 through 2016. Generally, for the majority of state and foreign jurisdictions where the Company does business, periods prior to fiscal year 2014 are no longer subject to examination. The Company has estimated that up to $0.3 million of unrecognized tax benefits related to income tax positions may be affected by the resolution of tax examinations or expiring statutes of limitation within the next twelve months. Audit outcomes and the timing of settlements are subject to significant uncertainty.