|3 Months Ended|
Jul. 31, 2021
|Income Tax Disclosure [Abstract]|
9. Income Taxes
The provision for income tax was an expense of $23.9 million in the three months ended July 31, 2021, compared to a benefit of $8.7 million in the three months ended July 31, 2020. This reflects a 23.8% and a 21.9% effective tax rate for the three months ended July 31, 2021 and 2020, respectively. Due to the negative business impact and uncertainties brought on by the COVID-19 outbreak in the three months ended July 31, 2020, the Company could not reliably estimate an annual effective tax rate based on projected income because small changes in the projected income produced significant variations in the estimated annual effective rate. As a result, the Company used an actual year-to-date effective tax rate as the best estimate of the annual effective tax rate for the three months ended July 31, 2020. In the second and third quarters of fiscal 2021, the Company saw business conditions improve, and the Company returned to the generally prescribed method of computing the tax provision for interim periods using an estimated annual effective tax rate based on projected income. The Company has continued with the use of an estimated annual effective tax rate based on projected income for the three months ended July 31, 2021. The variability in effective tax rate over time is primarily due to the impact of U.S. state income taxes and the jurisdictional mix of earnings.
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.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef