XML 32 R21.htm IDEA: XBRL DOCUMENT v3.25.1
Income Taxes
 6 Months Ended
Feb. 28, 2025
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 (benefit) 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 (benefit) provision for income taxes was (33.0)% and 21.6% as a percentage of income before income taxes for the three months ended February 28, 2025 and February 29, 2024, respectively. This 54.6% decrease in the effective tax rate from period to period was primarily due to the expiration of the statute of limitations on the uncertain tax position associated with the Tax Cuts and Jobs Act’s mandatory onetime “toll tax” on unremitted foreign earnings. The release of the uncertain tax position generated a favorable income tax adjustment of $11.9 million in the current quarter which was net of the tax effect of the related interest.
The (benefit) provision for income taxes was (4.5)% and 23.0% as a percentage of income before income taxes for the six months ended February 28, 2025 and February 29, 2024, respectively. This 27.5% decrease in the effective tax rate from period to period was primarily due to the expiration of the statute of limitations on the uncertain tax position associated with the Tax Cuts and Jobs Act’s mandatory onetime “toll tax” on unremitted foreign earnings as discussed above in the above section for the three months ended February 28, 2025.
The Company is subject to taxation in the U.S. and in various state and foreign jurisdictions. Due to expired statutes of limitations, the Company’s federal income tax returns for years prior to fiscal year 2022 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 2021 are no longer subject to examination. The Company is currently under audit in various state jurisdictions for fiscal years 2021 through 2022. The Company had an insignificant amount of unrecognized tax positions related to income tax positions that may be affected by the resolution of tax examinations or expiring statutes of limitations within the next twelve months. Audit outcomes and the timing of settlements are subject to significant uncertainty.