Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.21.2
Income Taxes
3 Months Ended
Jul. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

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.