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INCOME TAXES | 12 Months Ended
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Jun. 30, 2022
Income Tax Disclosure [Abstract] |
INCOME TAXES | (16) INCOME TAXES At the consummation of the Subsidiary Reorganization on December 1, 2021, the Company recorded a one-time deferred tax benefit of $33.5 million, primarily driven by deferred tax remeasurement due to tax rate changes and a valuation allowance release. Significant components of consolidated income tax expense (benefit) are as follows (in thousands):
| Year Ended June 30,
| 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |
Federal | $ | 864 |  |  | $ | 22,356 |  |  | $ | 11,394 |
State | 926 |  |  | 7,393 |  |  | 12,545 |
Total current tax expense | 1,790 |  |  | 29,749 |  |  | 23,939 |
Deferred: |  |  |  |  |
Federal | 49,335 |  |  | 22,165 |  |  | 35,768 |
State | 7,457 |  |  | (105,857) |  |  | 32,854 |
Total deferred tax expense (benefit) | 56,792 |  |  | (83,692) |  |  | 68,622 |
Total income tax expense (benefit) | $ | 58,582 |  |  | $ | (53,943) |  |  | $ | 92,561 |
The reconciliation between the Company’s income tax expense (benefit) and taxes computed at the federal statutory tax rate of 21.0% for fiscal years ended June 30, 2022, 2021 and 2020, is as follows (in thousands):
| Year Ended June 30,
| 2022 |  | 2021 |  | 2020
Tax at federal statutory rate | $ | 68,649 |  |  | $ | 52,635 |  |  | $ | 80,814 |
Partnership income not subject to tax | (701) |  |  | (4,375) |  |  | (40,154) |
State taxes (net of federal benefit) | 14,138 |  |  | 9,880 |  |  | 7,072 |
Remeasurement adjustments and other permanent items | 8,118 |  |  | 7,124 |  |  | (1,570) |
Change in valuation allowance | (31,361) |  |  | (25,328) |  |  | 12,472 |
Deferred tax remeasurement | (242) |  |  | (113,213) |  |  | 34,447 |
Uncertain tax position | 842 |  |  | 1,293 |  |  | 7,472 |
Change in tax status | — |  |  | 19,514 |  |  | — |
Other | (861) |  |  | (1,473) |  |  | (7,992) |
Total income tax expense (benefit) | $ | 58,582 |  |  | $ | (53,943) |  |  | $ | 92,561 |
Effective tax rate | 17.9 | % |  | (21.5) | % |  | 24.1 | %
The fiscal year 2022 effective tax rate of 17.9% differs from the statutory income tax rate of 21.0% largely driven by the aforementioned one-time deferred tax remeasurement and valuation allowance release as a result of the Subsidiary Reorganization. The fiscal year 2021 effective tax rate of (21.5)% differs from the statutory income tax rate of 21.0% primarily driven by the consummation of the merger on August 11, 2020. The Company simplified its tax structure, resulting in the Company and its subsidiaries forming one consolidated filing group for federal income tax purposes. As a result, the Company recorded a one-time deferred tax benefit of $108.8 million, primarily driven by deferred tax remeasurement due to tax rate changes and a valuation allowance release. The fiscal year 2020 effective tax rate of 24.1% differs from the statutory income tax rate of 21.0% primarily due to the remeasurement of deferred tax assets and liabilities as a result of a change to the State of North Carolina income tax law, partially offset by Premier LP income which is not subject to federal, state and local income taxes. Deferred Income Taxes The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of June 30, 2022 and 2021 are presented below (in thousands):
| June 30,
| 2022 |  | 2021
Deferred tax asset |  |  |
Purchased intangible assets and depreciation | $ | 631,415 |  |  | $ | 689,810 |
Stock compensation | 15,125 |  |  | 16,943 |
Accrued expenses | 49,161 |  |  | 41,474 |
Net operating losses and credits | 50,742 |  |  | 66,782 |
Other | 5,787 |  |  | 22,513 |
Total deferred tax assets | 752,230 |  |  | 837,522 |
Valuation allowance for deferred tax assets | (4,552) |  |  | (35,913) |
Net deferred tax assets | 747,678 |  |  | 801,609 |
Deferred tax liability |  |  |
Other liabilities | (22,646) |  |  | (19,785) |
Net deferred tax asset | $ | 725,032 |  |  | $ | 781,824 |
As of June 30, 2022 and 2021, the Company had net deferred tax assets of $725.0 million and $781.8 million, respectively. The decrease is largely attributable to deferred tax assets recorded in connection with the final exchange of Class B common units pursuant to the August 2020 Restructuring. At June 30, 2022, the Company had federal and state net operating loss carryforwards of $156.3 million and $130.4 million, respectively, primarily attributable to PHSI and PSCI. The resulting federal and state deferred tax assets are $32.7 million and $7.3 million, respectively. The federal and state net operating loss carryforwards generated prior to fiscal year 2019 expire between the years ending June 30, 2022 through June 30, 2038 while the net operating losses generated in fiscal year 2019 and beyond can be carried forward indefinitely, until utilized. A valuation allowance was established for federal and state losses as the Company believes it is more likely than not that a portion of these losses will not be realized in the near future. At June 30, 2022, the Company had federal research and development credit carryforwards of $12.4 million. The federal credit carryforwards expire at various times between the years ended June 30, 2023 through June 30, 2040, until utilized. As a result of the Subsidiary Reorganization, the Company believes it is more likely than not that the federal and state credit carryforwards will be realized in the near future, so the previously recorded valuation allowance was released during the year ended June 30, 2022. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and income tax purposes. The Company assessed the future realization of the tax benefit of its existing deferred tax assets and concluded that it is more likely than not that a portion of the deferred tax assets will not be realized in the future. As a result, the Company recorded a valuation allowance of $4.6 million against its deferred tax assets at June 30, 2022. The valuation allowance decreased by $31.3 million from the $35.9 million valuation allowance recorded as of June 30, 2021. The decrease is primarily driven by the utilization of the net operating loss carryforward as a result of the aforementioned Subsidiary Reorganization. Unrecognized Tax Benefits The Company recognizes income tax benefits for those income tax positions determined more likely than not to be sustained upon examination, based on the technical merits of the positions. The reserve for uncertain income tax positions is included in other liabilities in the Consolidated Balance Sheets. A reconciliation of the beginning and ending gross amounts of the Company’s uncertain tax position reserves for the years ended June 30, 2022, 2021 and 2020 are as follows (in thousands):
| Year Ended June 30,
| 2022 |  | 2021 |  | 2020
Beginning of year balance | $ | 16,704 |  |  | $ | 15,596 |  |  | $ | 8,266 |
Increases in prior period tax positions | 120 |  |  | 111 |  |  | 7,734 |
Decreases in prior period tax positions | (63) |  |  | — |  |  | (48) |
Reductions on settlements and lapse in statute of limitations | (21) |  |  | (27) |  |  | (2,276) |
Increases in current period tax positions | 384 |  |  | 1,024 |  |  | 1,920 |
End of year balance | $ | 17,124 |  |  | $ | 16,704 |  |  | $ | 15,596 |
If the Company were to recognize the benefits of these uncertain tax positions, the income tax provision would be impacted by $15.6 million, $14.8 million and $12.8 million, including interest and penalties and net of the federal and state benefit for income taxes, for the years ended June 30, 2022, 2021 and 2020, respectively. The Company recognizes interest and penalties accrued on uncertain income tax positions as part of the income tax provision. The amount of accrued interest and penalties was $4.4 million, $4.1 million, and $2.5 million at 2022, 2021 and 2020, respectively. Federal tax returns for tax years June 30, 2018 through 2021 remain open as of June 30, 2022. The Company is subject to ongoing state and local examinations for various periods. Activity related to these examinations did not have a material impact on the Company’s financial position or results of operations. The Company made cash tax payments of $3.1 million and $44.0 million during the years ended June 30, 2022 and 2021, respectively.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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