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Income Taxes
 6 Months Ended
Feb. 29, 2024
Income Tax Disclosure [Abstract]  
Income Taxes 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 21.6% and 20.8% of income before income taxes for the three months ended February 29, 2024 and February 28, 2023, respectively. This 0.8% increase in the effective tax rate from period to period was primarily due to the following impacts:
Description of impacts on the Company’s estimated annual effective tax rate
Unfavorable/(Favorable)
Higher tax rates in certain foreign jurisdictions from period to period
1.7%
An increase in non-deductible performance based compensation
0.7%
Windfalls from the settlement of stock-based equity awards in the second quarter of fiscal year 2024
(0.8)%
Benefits related to income tax positions affected by expiring statutes of limitation
(0.6)%
The provision for income taxes was 23.0% and 20.9% of income before income taxes for the six months ended February 29, 2024 and February 28, 2023, respectively. This 2.1% increase in the effective tax rate from period to period was primarily due to the following impacts:
Description of impacts on the Company’s estimated annual effective tax rate
Unfavorable/(Favorable)
A non-recurring charitable donation made in the first quarter of fiscal year 2023
1.9%
Higher tax rates in certain foreign jurisdictions from period to period
1.4%
Lower year to date shortfalls from the settlements of stock-based equity awards in fiscal year 2024
(1.3)%
The Company is subject to taxation in the U.S. and in various state and foreign jurisdictions. Due to expired statutes, the Company’s federal income tax returns for years prior to fiscal year 2018 are not subject to examination by the U.S. Internal Revenue Service. Generally, for the majority of state and foreign jurisdictions where the Company does business, periods prior to fiscal year 2020 are no longer subject to examination. The Company is currently under audit in various state jurisdictions for fiscal years 2021 through 2022. The Company has estimated that up to $12.4 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. This includes $12.1 million associated with the Tax Cuts and Jobs Act’s mandatory one-time “toll tax” on unremitted foreign earnings. Audit outcomes and the timing of settlements are subject to significant uncertainty.