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Note 11. Income Taxes | 12 Months Ended
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Jun. 30, 2021
Income Taxes [Abstract] |
Income Tax Disclosure | Income Taxes The U.S. Tax Cuts and Jobs Act (“Tax Reform”) was enacted into law on December 22, 2017, making broad and complex changes to the U.S. tax code, for which complete guidance may have not yet been issued. Tax Reform, in addition to other changes, required a one-time transition tax on certain unremitted earnings of foreign subsidiaries that is payable over an eight-year period. As of both June 30, 2021 and 2020, the remaining provision recorded for the one-time deemed repatriation tax was $9.8 million, payable through fiscal year 2026, with the long-term portion recorded in Long-term income taxes payable on the Consolidated Balance Sheets. As of June 30, 2021, $0.9 million of the remaining deemed repatriation tax is short term and is recorded in Accrued expenses on the Consolidated Balance Sheet. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the deferred tax assets and liabilities as of June 30, 2021 and 2020, were as follows:
(Amounts in Thousands) | 2021 |  | 2020
Deferred Tax Assets: |  |  |
Receivables | $ | 95 |  |  | $ | 145 |
Inventory | 1,726 |  |  | 1,894 |
Employee benefits | 282 |  |  | 224 |
Deferred compensation | 8,732 |  |  | 5,338 |
Other current liabilities | 1,115 |  |  | 265 |
Tax credit carryforwards | 3,388 |  |  | 2,445 |
Goodwill | 1,328 |  |  | 1,608 |
Net operating loss carryforward | 2,037 |  |  | 2,398 |
Miscellaneous | 5,496 |  |  | 4,020 |
Valuation Allowance | (1,802) |  |  | (1,637) |
Total asset | $ | 22,397 |  |  | $ | 16,700 |
Deferred Tax Liabilities: |  |  |
Other intangible assets | $ | 1,210 |  |  | $ | 1,313 |
Property and equipment | 869 |  |  | 1,211 |
Net foreign currency gains | 2 |  |  | 22 |
Miscellaneous | 659 |  |  | 581 |
Total liability | $ | 2,740 |  |  | $ | 3,127 |
Net Deferred Income Taxes | $ | 19,657 |  |  | $ | 13,573 |
Income tax benefits associated with the net operating loss carryforwards expire from fiscal year 2023 to 2040. Income tax benefits associated with tax credit carryforwards primarily expire from fiscal year 2022 to 2030. A valuation allowance was provided as of June 30, 2021 and 2020 for deferred tax assets related to certain state credits of, in millions, $1.8 and $1.6, respectively. Except as reserved for in the valuation allowance, we believe our tax credit and net operating loss carryforwards are more likely than not to be realized in the future. The components of income before taxes on income are as follows:
| Year Ended June 30
(Amounts in Thousands) | 2021 |  | 2020 |  | 2019
United States | $ | 10,439 |  |  | $ | (6,117) |  |  | $ | 11,191 |
Foreign | 59,615 |  |  | 31,274 |  |  | 27,294 |
Total income before taxes on income | $ | 70,054 |  |  | $ | 25,157 |  |  | $ | 38,485 |
The aggregate unremitted earnings of the Company’s foreign subsidiaries were approximately $313 million as of June 30, 2021. Most of these accumulated unremitted foreign earnings have been invested in active non-U.S. business operations, and we expect we may only repatriate a minor amount of these earnings to the United States in a tax-efficient manner. Our intent is to permanently reinvest these funds outside of the United States, and our current plans do not demonstrate a need to repatriate these funds to our U.S. operations. However, if such funds were repatriated, a portion of the funds remitted may be subject to applicable non-U.S. income and withholding taxes. The provision for income taxes is composed of the following items:
| Year Ended June 30
(Amounts in Thousands) | 2021 |  | 2020 |  | 2019
Current Taxes: |  |  |  |  |
Federal | $ | 3,921 |  |  | $ | (1,666) |  |  | $ | 872 |
Foreign | 14,664 |  |  | 8,479 |  |  | 7,545 |
State | 769 |  |  | (29) |  |  | 203 |
Total payable | $ | 19,354 |  |  | $ | 6,784 |  |  | $ | 8,620 |
Deferred Taxes: |  |  |  |  |
Federal | $ | (2,459) |  |  | $ | 99 |  |  | $ | 67 |
Foreign | (2,598) |  |  | 237 |  |  | (1,177) |
State | (1,199) |  |  | (1,138) |  |  | (603) |
Valuation allowance | 165 |  |  | 979 |  |  | 20 |
Total deferred | $ | (6,091) |  |  | $ | 177 |  |  | $ | (1,693) |
Total provision for income taxes | $ | 13,263 |  |  | $ | 6,961 |  |  | $ | 6,927 |
A reconciliation of the statutory U.S. income tax rate to the Company’s effective income tax rate follows:
| Year Ended June 30
| 2021 |  | 2020 |  | 2019
(Amounts in Thousands) | Amount |  | % |  | Amount |  | % |  | Amount |  | %
Tax computed at U.S. federal statutory rate | $ | 14,711 |  |  | 21.0 | % |  | $ | 5,283 |  |  | 21.0 | % |  | $ | 8,082 |  |  | 21.0 | %
State income taxes, net of federal income tax benefit | (374) |  |  | (0.5) |  |  | (1,128) |  |  | (4.5) |  |  | (320) |  |  | (0.8) |
Foreign tax rate differential | 1,320 |  |  | 1.9 |  |  | 714 |  |  | 2.8 |  |  | 313 |  |  | 0.8 |
Impact of foreign exchange rates on foreign income taxes | (1,111) |  |  | (1.6) |  |  | 867 |  |  | 3.4 |  |  | 156 |  |  | 0.4 |
Non-deductible goodwill impairment | — |  |  | — |  |  | 388 |  |  | 1.5 |  |  | — |  |  | — |
Valuation allowance | 165 |  |  | 0.2 |  |  | 979 |  |  | 3.9 |  |  | 20 |  |  | 0.1 |
Research credit | (996) |  |  | (1.4) |  |  | (1,056) |  |  | (4.2) |  |  | (627) |  |  | (1.6) |
Deemed repatriation | — |  |  | — |  |  | — |  |  | — |  |  | (416) |  |  | (1.1) |
Revaluation of net deferred tax assets | — |  |  | — |  |  | — |  |  | — |  |  | (10) |  |  | — |
Global intangible low tax income | 181 |  |  | 0.3 |  |  | 607 |  |  | 2.4 |  |  | — |  |  | — |
Other - net | (633) |  |  | (1.0) |  |  | 307 |  |  | 1.4 |  |  | (271) |  |  | (0.8) |
Total provision for income taxes | $ | 13,263 |  |  | 18.9 | % |  | $ | 6,961 |  |  | 27.7 | % |  | $ | 6,927 |  |  | 18.0 | %
Net cash payments for income taxes were, in thousands, $13,358, $9,096 and $10,172 in fiscal years 2021, 2020, and 2019, respectively. Changes in the unrecognized tax benefit, excluding accrued interest and penalties, during fiscal years 2021, 2020, and 2019 were as follows:
(Amounts in Thousands) | 2021 |  | 2020 |  | 2019
Beginning balance - July 1 | $ | 954 |  |  | $ | 904 |  |  | $ | 160 |
Tax positions related to prior fiscal years: |  |  |  |  |
Additions | 142 |  |  | 116 |  |  | 758 |
Reductions | — |  |  | — |  |  | — |
Tax positions related to current fiscal year: |  |  |  |  |
Additions | — |  |  | — |  |  | — |
Reductions | — |  |  | — |  |  | — |
Settlements | (8) |  |  | — |  |  | — |
Lapses in statute of limitations | (76) |  |  | (66) |  |  | (14) |
Ending balance - June 30 | $ | 1,012 |  |  | $ | 954 |  |  | $ | 904 |
Portion that, if recognized, would reduce tax expense and effective tax rate | $ | 323 |  |  | $ | 262 |  |  | $ | 214 |
We do not expect the change in the amount of unrecognized tax benefits in the next 12 months to have a significant impact on our results of operations or financial position. We recognize interest and penalties related to unrecognized tax benefits in Provision for Income Taxes on the Consolidated Statements of Income. Interest and penalties accrued for unrecognized tax benefits as of June 30, 2021, 2020, and 2019 was $1.2 million, $1.6 million, and $1.6 million. Expenses related to interest and penalties in fiscal years 2021, 2020, and 2019 were not material. Liabilities for unrecognized tax benefits, including interest and penalties, have been recorded as a result of the GES acquisition related to pre-closing tax periods of Global Equipment Services & Manufacturing Vietnam Company Limited. This reflects management’s best assessment of the estimated taxes, interest, and penalties that are more likely than not to be paid under the applicable laws in the various jurisdictions. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. The Company or its wholly-owned subsidiaries file U.S. federal income tax returns and income tax returns in various state, local, and foreign jurisdictions. We are no longer subject to any significant U.S. federal tax examinations by tax authorities for years before fiscal year 2018. We are subject to income tax examinations by various, state, local, and foreign jurisdiction tax authorities for years after June 30, 2016. Global Equipment Services & Manufacturing Vietnam Company Limited is subject to U.S. federal tax examinations and various state and local jurisdictions by tax authorities for years after December 31, 2007 and for various foreign jurisdictions for years after December 31, 2009 relating to periods prior to the acquisition date.

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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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://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 http://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 http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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