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INCOME TAXES | 12 Months Ended
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Mar. 31, 2023
INCOME TAXES [Abstract] |
INCOME TAXES | 14. INCOME TAXES We account for our tax positions in accordance with Codification Topic 740. Under the guidance, we evaluate uncertain tax positions based on the two-step approach. The first step is to evaluate each uncertain tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained in an audit, including resolution of related appeals or litigation processes, if any. For tax positions that are not likely of being sustained upon audit, the second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50 percent likely of being realized upon ultimate settlement. As of March 31, 2023, we do not have any unrecognized tax benefits for uncertain tax positions. As of March 31, 2022, our total gross unrecognized tax benefits recorded for uncertain income tax, and interest and penalties thereon, were negligible. We recognize accrued interest and penalties related to unrecognized tax benefits as part of income tax expense. We file income tax returns, including returns for our subsidiaries, with federal, state, local, and foreign jurisdictions. The tax years ended March 31, 2020, March 31, 2021, and March 31, 2022, are subject to examination by federal and state taxing authorities. Various state and local income tax returns are also under examination by taxing authorities. We do not believe that the outcome of any examination will have a material impact on our financial statements. A reconciliation of income taxes computed at the statutory federal income tax rate of 21.0% to the provision for income taxes included in the consolidated statements of operations is as follows (in thousands, except percentages):
|  | Year Ended March 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Income tax expense computed at the U.S. statutory federal rate |  | $ | 34,224 |  |  | $ | 30,845 |  |  | $ | 22,450 |
State income tax expense—net of federal benefit |  |  | 8,754 |  |  |  | 8,937 |  |  |  | 6,941 |
Non-deductible executive compensation |  |  | 1,708 |  |  |  | 1,749 |  |  |  | 2,052 |
Other |  |  | (1,068 | ) |  |  | (247 | ) |  |  | 1,066 |
Provision for income taxes |  | $ | 43,618 |  |  | $ | 41,284 |  |  | $ | 32,509 |
Effective income tax rate |  |  | 26.8 | % |  |  | 28.1 | % |  |  | 30.4 | %
The components of the provision for income taxes are as follows (in thousands):
|  | Year Ended March 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 30,928 |  |  | $ | 32,309 |  |  | $ | 26,054 |
State |  |  | 10,110 |  |  |  | 11,681 |  |  |  | 9,882 |
Foreign |  |  | 499 |  |  |  | 894 |  |  |  | 770 |
Total current expense |  |  | 41,537 |  |  |  | 44,884 |  |  |  | 36,706 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 1,301 |  |  |  | (3,289 | ) |  |  | (3,067 | )
State |  |  | 970 |  |  |  | (370 | ) |  |  | (1,096 | )
Foreign |  |  | (190 | ) |  |  | 59 |  |  |  | (34 | )
Total deferred expense (benefit) |  |  | 2,081 |  |  |  | (3,600 | ) |  |  | (4,197 | )
Provision for income taxes |  | $ | 43,618 |  |  | $ | 41,284 |  |  | $ | 32,509 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities were as follows (in thousands):
|  | March 31, |
|  | 2023 |  |  | 2022 |
Deferred tax assets: |  |  |  |  |  |
Accrued vacation |  | $ | 2,251 |  |  | $ | 2,391 |
Deferred revenue |  |  | 5,448 |  |  |  | 5,090 |
Allowance for credit losses |  |  | 1,063 |  |  |  | 951 |
Restricted stock |  |  | 654 |  |  |  | 616 |
Other deferred tax assets |  |  | 1,697 |  |  |  | 743 |
Accrued bonus |  |  | 2,323 |  |  |  | 2,532 |
Lease liabilities |  |  | 3,939 |  |  |  | 1,857 |
Other credits and carryforwards |  |  | 277 |  |  |  | 249 |
Gross deferred tax assets |  |  | 17,652 |  |  |  | 14,429 |
Less: valuation allowance |  |  | (112 | ) |  |  | (250 | )
Net deferred tax assets |  |  | 17,540 |  |  |  | 14,179 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property and equipment |  |  | (2,926 | ) |  |  | (2,295 | )
Operating leases |  |  | (3,789 | ) |  |  | (2,759 | )
Prepaid expenses |  |  | (1,729 | ) |  |  | (887 | )
Right-of-use assets |  |  | (3,885 | ) |  |  | (1,869 | )
Tax deductible goodwill |  |  | (2,244 | ) |  |  | (1,319 | )
Total deferred tax liabilities |  |  | (14,573 | ) |  |  | (9,129 | )
Net deferred tax asset |  | $ | 2,967 |  |  | $ | 5,050 |
Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. Based on this evaluation as of March 31, 2023, a valuation allowance of $0.1 million was recorded, to offset gross deferred tax assets primarily attributable to net operating losses at certain of the foreign subsidiaries and foreign tax credit carry forwards. We believe that it is more likely than not that we will realize the remaining gross deferred tax assets through generating taxable income or the reversal of existing temporary differences attributable to the gross deferred tax liabilities.

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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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