Income Taxes

12 Months Ended

Apr. 30, 2021

16. Income Taxes

Income tax expense/(benefit) from continuing operations consisted of the following (in thousands):

	For the Year Ended April 30,
	2021		2020			2019
Current:
Federal	$	64,417	$	9,877		$	5,567
State		9,530		1,841			1,918
Total current		73,947		11,718			7,485
Deferred:
Deferred federal		358		(164	)		1,665
Deferred state		89		(32	)		134
Total deferred		447		(196	)		1,799
Total income tax expense/(benefit)	$	74,394	$	11,522		$	9,284

The following table presents a reconciliation of the provision for income taxes from continuing operations at statutory rates to the provision (benefit) in the consolidated financial statements (in thousands):

	For the Year Ended April 30,
	2021			2020			2019
Federal income taxes expected at the statutory rate (a)	$	66,773		$	8,233		$	7,183
State income taxes, less federal income tax benefit		7,685			1,628			1,737
Stock compensation		(578	)		1,077			646
Business meals and entertainment		115			257			144
Research and development tax credit		(297	)		(496	)		(460	)
Non-deductible Separation expenses		195			688			—
Other		501			135			105
Federal tax rate change on deferred taxes		—			—			(71	)
Total income tax expense/(benefit)	$	74,394		$	11,522		$	9,284

(a)	We had a statutory rate of 21% in fiscal 2021, 2020 and 2019.

Deferred tax assets (liabilities) related to temporary differences are the following (in thousands):

	For the Years Ended April 30,
	2021			2020
Non-current tax assets (liabilities):
Net operating loss carryforwards and tax credits	$	3,189		$	3,158
Inventories		4,508			6,082
Accrued expenses, including compensation		4,952			4,063
Product liability		263			434
Accrued promotions		139			69
Workers' compensation		497			486
Warranty reserve		1,303			987
Stock-based compensation		1,517			2,319
State bonus depreciation		888			1,287
Property taxes		(250	)		(254	)
Property, plant, and equipment		(13,994	)		(15,889	)
Intangible assets		(914	)		(633	)
Right-of-use assets		(1,091	)		(1,685	)
Right-of-use liabilities		1,131			1,734
Pension		293			241
Other		(38	)		331
Less valuation allowance		(3,297	)		(3,187	)
Net deferred tax asset/(liability) — total	$	(904	)	$	(457	)

We had no federal net operating loss carryforwards in fiscal 2021.

There were $17.7 million and $17.7 million in state net operating loss carryforwards as of April 30, 2021 and 2020, respectively. The state net operating loss carryforwards will expire between April 30, 2027 and April 30, 2040. There were $2.9 million of state tax credit carryforwards as of April 30, 2021 and 2020. The state tax credit carryforwards will expire between April 30, 2023 and April 30, 2025 or have no expiration date.

As of both April 30, 2021 and 2020, valuation allowances of $904,000 and $2.3 million were provided on our deferred tax assets for those state net operating loss carryforwards, and state tax credits, respectively, that we do not anticipate using prior to their expiration. Additional valuation allowances of $79,000 were provided on our deferred income tax assets as of April 30, 2021, as we believe that it is more likely than not that all such assets will not be realized. These allowances related to IRC Section 162(m) limitations on the deductibility of certain executive compensation. Recording a valuation allowance or reversing a valuation allowance could have an effect on our future results of operations and financial position.

The income tax provisions represent effective tax rates of 23.4% and 29.4% for the fiscal year ended April 30, 2021 and 2020, respectively.

At April 30, 2021 and 2020, we did not have any gross tax-effected unrecognized tax benefits.

With limited exception, we are subject to U.S. federal, state, and local, or non-U.S. income tax audits by tax authorities for fiscal years subsequent to April 30, 2017.

- 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.

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