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Income Taxes | 12 Months Ended
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Jun. 30, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Income tax expense consists of the following for the periods presented:
| Year Ended June 30,
(in thousands) | 2021 |  | 2020 |  | 2019
Current income taxes: |  |  |  |  |
Federal | $ | — |  |  | $ | — |  |  | $ | (64) |
State | 149 |  |  | 63 |  |  | 107 |
Total | 149 |  |  | 63 |  |  | 43 |
Deferred income taxes: |  |  |  |  |
Federal | 29,317 |  |  | 21,021 |  |  | 19,748 |
State | 5,337 |  |  | 3,932 |  |  | 2,243 |
Total | 34,654 |  |  | 24,953 |  |  | 21,991 |
Income tax expense | $ | 34,803 |  |  | $ | 25,016 |  |  | $ | 22,034 |
The Jobs Act, signed into law on December 22, 2017, reduced the tax rate for corporations effective for tax years beginning after January 1, 2018. In addition to the reduction in the corporate tax rate, it also (1) changed the rules related to utilization of net operating loss ("NOL") carryforwards generated in tax years beginning after December 31, 2017; (2) eliminated the corporate alternative minimum tax ("AMT") and changed how existing AMT credits can be realized; (3) expanded bonus depreciation that will allow for full expensing of qualifying property; and (4) created a new limitation on deductible interest expense. The Company’s statutory federal tax rate is 21% and its current state tax rate (net of federal benefit) is 3.22% for the year ended June 30, 2021. The Company’s statutory federal tax rate was 21% and its state tax rate (net of federal benefit) was 3.85% for the year ended June 30, 2020. The Company’s statutory federal tax rate was 21% and its state tax rate (net of federal benefit) was 3.83% for the year ended June 30, 2019. The differences from the Company’s statutory tax rate to the effective tax rate shown below for the years ended June 30, 2021, 2020, and 2019, were primarily due to the net effects of state income taxes partially offset by HPIP tax credits and the exercise of non-qualified stock options. The following reconciles the statutory federal income tax rate to the effective income tax rate for the periods presented:
| Year Ended June 30,
| 2021 |  | 2020 |  | 2019
Federal statutory rate | 21.0% |  | 21.0% |  | 21.0%
Differences in income tax expense resulting from: |  |  |  |  |
State income taxes | 3.2 |  | 4.0 |  | 3.8
Kansas HPIP credit | (0.5) |  | (0.9) |  | (1.5)
Non-qualified stock option exercises | (3.6) |  | (0.5) |  | —
Other | 0.9 |  | — |  | —
Effective income tax rate | 21.0% |  | 23.6% |  | 23.3%
Significant components of the deferred tax assets and liabilities were as follows as of June 30:
(in thousands) | 2021 |  | 2020
Deferred tax assets: |  |  |
Accruals and other | $ | 15,179 |  |  | $ | 10,663 |
Lease liability | 11,300 |  |  | — |
Deferred rent | — |  |  | 3,349 |
Interest expense limitation | 14,517 |  |  | 7,269 |
Net operating losses | 76,281 |  |  | 27,557 |
Credit carryforward | 6,486 |  |  | 5,413 |
Total deferred tax assets | 123,763 |  |  | 54,251 |
Deferred tax liabilities: |  |  |
Commissions receivable | (251,768) |  |  | (155,297) |
Lease right-of-use asset | (8,133) |  |  | — |
Basis difference in fixed and amortizable assets | (4,850) |  |  | (4,798) |
Total deferred tax liabilities | (264,751) |  |  | (160,095) |
Net long-term deferred tax liabilities | $ | (140,988) |  |  | $ | (105,844) |
For tax purposes, pursuant to Treasury Regulation §1.451-3(b)(4)(viii), the Company defers revenue relating to certain commissions receivables into subsequent years until it is collected, which gives rise to a significant deferred tax liability. Assessing the realizability of the Company’s deferred tax assets is dependent upon several factors, including the likelihood and amount, if any, of future taxable income in relevant jurisdictions during the periods in which those temporary differences become deductible. The Company forecasts taxable income by considering all available positive and negative evidence, including historical data and future plans and estimates. These assumptions require significant judgment about future taxable income. As a result, the amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change. Since the Company has shown positive cumulative pre-tax income for the past three fiscal years and expects the reversal of the deferred tax liabilities as a result of cash commissions received, the Company continues to recognize its deferred tax assets as of June 30, 2021, as it believes it is more likely than not that the net deferred tax assets will be realized. As such, the Company does not believe a valuation allowance is necessary as of June 30, 2021, and will continue to evaluate in the future as circumstances may change. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law. The CARES Act provided numerous tax provisions and other stimulus measures to aid companies as they adjust to the impacts from COVID-19. The Company availed itself of the technical correction for qualified leasehold improvements eligible for 100% tax bonus depreciation and elected to defer the employer-paid portion of social security taxes, which did not have a material impact on the financial statements. As of June 30, 2021, the Company has NOL carryforwards for federal and state income tax purposes of $296.1 million and $277.2 million, respectively. Other than the federal NOLs generated for the tax years ended June 30, 2021 and 2020, which have an indefinite carryforward period, the federal carryforwards will expire in 2035 through 2039. The state carryforwards will expire in 2025 through 2040. The Company is subject to income taxes in the US federal and various state jurisdictions. Tax regulations within each jurisdiction are subject to interpretation of the related tax laws and regulations and require the application of significant judgment. The federal tax returns from tax years 2017 through 2019 and state tax returns from tax years 2016 through 2019 remain open to examination by significant domestic taxing jurisdictions to which the Company is subject. NOLs generated by the Company for tax years 2016 to 2019 will remain open to examination by the significant domestic taxing jurisdictions until the statute of limitations expires for the year in which the loss carry overs are utilized. NOLs generated by the Company for tax years prior to 2016 also remain open to examination during the year in which the loss carry overs are utilized.

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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=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 http://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 http://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 http://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 http://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 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 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 http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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