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.


(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.


	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.


	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


	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	%


(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.