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Income Taxes (Notes) | 6 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Tax Cuts and Jobs Act The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017. The Act makes broad and complex changes to the U.S. tax code, which have affected our current results and will affect our future results. The following are significant changes in the tax code that became effective for the Company beginning July 1, 2018:
• | eliminating the deduction for domestic production activity;
• | limiting the annual deduction for business interest;
• | taxing global intangible low-tax income;
• | allowing a deduction for domestically earned foreign intangible income; and
• | establishing a new base erosion and anti-abuse tax on payments between U.S. taxpayers and foreign related parties.
As of December 31, 2018, we have completed our accounting for the tax effect of the Act as follows: Deferred Taxes Remeasurement We remeasured our domestic deferred tax assets and liabilities based on the rates at which we expect them to reverse in the future. At June 30, 2018, we completed the remeasurement of our domestic deferred tax assets and liabilities which resulted in an income tax benefit of $0.5 million included in fiscal 2018. One-time Transition Tax on Unrepatriated Earnings of Certain Foreign Subsidiaries The Act includes a one-time transition tax based on our total post-1986 foreign earnings and profits ("E&P") which we have previously deferred from U.S. income taxes. Based on our completed calculations surrounding this tax, we incurred no additional tax related to this provision since our foreign subsidiaries have overall negative E&P. Global Intangible Low-Tax Income (“GILTI”) The Act creates a new requirement that certain income earned by controlled foreign corporations must be included currently in the gross income of the U.S. shareholder. Under U.S. GAAP, we have made an accounting policy election to treat taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred instead of factoring such amounts into the measurement of our deferred taxes. For fiscal 2019, we project to have no U.S. taxable income inclusion related to GILTI. Valuation Allowances on Foreign Tax Credit Carryforwards We continue to assess our ability to utilize our foreign tax credits in light of the lower U.S. federal income tax rate. As of December 31, 2018, we had $1.5 million of foreign tax credit carryforwards. We have placed a valuation allowance on $0.2 million of credits expiring in fiscal 2019 and fiscal 2020. Of the remaining $1.3 million, $0.6 million will expire in fiscal 2021 and the remaining $0.7 million of credits will expire in fiscal 2023 through fiscal 2025 if not utilized. The majority of these credits were generated by our branch operations in Canada. Future operations of our Canadian branches will impact our ability to utilize these credits. Indefinite Reinvestment Assertion We do not provide for outside basis differences under the indefinite reinvestment assertion of ASC 740-30. Based on our analysis of the Act, we do not anticipate the need to provide for additional taxes for basis differences or withholding taxes on remitted foreign earnings in the immediate future. Effective Tax Rate Our effective tax rates for the three and six months ended December 31, 2018 were 27.4% and 23.7%, respectively, compared to (5.8)% and 25.2% for the same periods a year ago. The effective tax rate for the three months ended December 31, 2018 was in line with our expected effective tax rate of 27.0% for fiscal 2019. The effective tax rate for the six months ended December 31, 2018 was positively impacted by $0.3 million of excess tax benefits related to the vesting of stock-based compensation awards. The effective tax rates in fiscal 2018 were positively impacted by a one-time $1.2 million deferred taxes remeasurement adjustment in connection with accounting for the Act.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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