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Income Taxes | 12 Months Ended
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Sep. 30, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 13: INCOME TAXES The following table presents the significant components of the income tax provision from continuing operations:
| Fiscal Year Ended September 30,
| 2016 |  | 2015 |  | 2014
| (in thousands)
Current: |  |  |  |  |
Federal | $ | 11,120 |  |  | $ | (42,001 | ) |  | $ | 13,076 |
State and foreign | 3,193 |  |  | 2,000 |  |  | (11,132 | )
| 14,313 |  |  | (40,001 | ) |  | 1,944 |
Deferred: |  |  |  |  |
Federal | (3,766 | ) |  | 16,580 |  |  | (278 | )
State and foreign | (1,186 | ) |  | 9,396 |  |  | 2,785 |
| (4,952 | ) |  | 25,976 |  |  | 2,507 |
Total income tax expense (benefit) | $ | 9,361 |  |  | $ | (14,025 | ) |  | $ | 4,451 |
The following table presents a reconciliation of income taxes calculated at the statutory rate and the provision for income taxes attributable to continuing operations:
| Fiscal Year Ended September 30,
| 2016 |  | 2015 |  | 2014
| (in thousands)
Income tax expense (benefit) at the federal statutory rate | $ | 128 |  |  | $ | (23,172 | ) |  | $ | 2,761 |
State taxes, net of federal benefit | 2,476 |  |  | (701 | ) |  | (909 | )
Captive insurance company | — |  |  | (393 | ) |  | (410 | )
Non-deductible items | 1,718 |  |  | 449 |  |  | 457 |
Foreign tax credit | 2,788 |  |  | (2,413 | ) |  | (2,174 | )
Foreign rate differential | 277 |  |  | 880 |  |  | — |
Change in valuation allowance | 1,511 |  |  | 4,846 |  |  | 481 |
Uncertain tax positions | — |  |  | 1,781 |  |  | 3,016 |
Tax basis balance sheet adjustment | — |  |  | 2,516 |  |  | 941 |
Other | 463 |  |  | 2,182 |  |  | 288 |
Total income tax expense (benefit) | $ | 9,361 |  |  | $ | (14,025 | ) |  | $ | 4,451 |
Effective tax rate | 2,579 | % |  | 21 | % |  | 56 | %
The amount of income tax allocated to discontinued operations was a benefit of $15.1 million, $16.4 million, and $17.0 million during fiscal 2016, 2015, and 2014, respectively. The following table shows significant components of our deferred tax assets and liabilities:
| September 30,
| 2016 |  | 2015
| (in thousands)
Deferred tax assets: |  |  |
Cash Converters International | $ | 15,314 |  |  | $ | 8,645 |
Tax over book inventory | 5,113 |  |  | 4,521 |
Accrued liabilities | 11,276 |  |  | 14,428 |
Pawn service charges receivable | 11,521 |  |  | 12,588 |
Note receivable discount | 2,427 |  |  | — |
Stock compensation | 2,065 |  |  | 2,711 |
Foreign tax credit | 2,706 |  |  | 4,249 |
Capital loss carryforward | 8,017 |  |  | 8,017 |
State and foreign net operating loss carryforwards | 12,891 |  |  | 10,715 |
Other | 694 |  |  | 2,143 |
Total deferred tax assets before valuation allowance | 72,024 |  |  | 68,017 |
Valuation allowance | (21,078 | ) |  | (19,567 | )
Net deferred tax assets | 50,946 |  |  | 48,450 |
Deferred tax liabilities: |  |  |
Tax over book amortization | 14,060 |  |  | 12,690 |
Tax over book depreciation | 445 |  |  | 417 |
Prepaid expenses | 1,138 |  |  | 1,167 |
Total deferred tax liabilities | 15,643 |  |  | 14,274 |
Net deferred tax asset | $ | 35,303 |  |  | $ | 34,176 |
As of September 30, 2016, we had gross state net operating loss carryforwards of approximately $89.0 million. These carryforwards begin to expire in 2017 if not utilized as well as foreign net operating loss carryforwards of $18.5 million which will expire between 2030 and 2036 if not utilized. Additionally, we have a $2.7 million foreign tax credit that will expire during the years 2024 to 2026 that we expect is more likely than not to be fully utilized based on the weight of available evidence. Deferred tax assets and liabilities are recorded for the estimated tax impact of temporary differences between the tax basis and book basis of assets and liabilities. A valuation allowance is established against a deferred tax asset when it is more likely than not that the deferred tax asset will not be realized. The valuation allowance increased by $1.5 million in fiscal 2016, primarily due to recording additional valuation allowances on losses in certain foreign jurisdictions due to the likelihood that they will expire unutilized because we do not expect to recognize sufficient income in the jurisdictions in which the tax attributes were created, offset by the utilization of Canadian net operating loss not previously benefitted. Management believes that our results from future operations will generate sufficient taxable income in the appropriate jurisdictions such that it is more likely than not that the remaining deferred tax assets will be realized. Deferred taxes are not provided for undistributed earnings of foreign subsidiaries of approximately $11.0 million which are intended to be reinvested outside of the U.S. Accordingly, no provision for U.S. federal income and foreign withholding taxes associated with a distribution of those earnings has been made. We estimate that, upon distribution of our share of these earnings, we would be subject to United States income taxes of approximately $0.5 million as of September 30, 2016. We provided deferred income taxes on all undistributed earnings from Cash Converters International. Any taxes paid to foreign governments on these earnings may be used in whole or in part as credits against the United States tax on any dividends distributed from such earnings. The following table presents a rollforward of unrecognized tax benefits:
| Fiscal Year Ended September 30,
| 2016 |  | 2015 |  | 2014
| (in thousands)
Beginning balance | $ | 6,058 |  |  | $ | 4,402 |  |  | $ | 1,432 |
Tax positions taken during the current period | — |  |  | 1,656 |  |  | 2,970 |
Ending balance | $ | 6,058 |  |  | $ | 6,058 |  |  | $ | 4,402 |
All of the above unrecognized tax benefits, if recognized, would impact our effective tax rate for the respective period of each ending balance. We are subject to United States, Mexico and Canada income taxes as well as income taxes levied by various state and local jurisdictions. With few exceptions, we are no longer subject to examinations by tax authorities for years before the tax year ended September 30, 2013. Management believes that adequate provisions have been made for any adjustments that may result from tax examinations.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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