Quarterly report pursuant to Section 13 or 15(d)

Note 7 - Income Taxes

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Note 7 - Income Taxes
3 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
(
7
)
Income Taxes
 
The Company reviews its expected annual effective income tax rates and makes changes on a quarterly basis as necessary based on certain factors such as changes in forecasted annual operating income; changes to actual or forecasted permanent book to tax differences; impacts from future tax audits with state, federal or foreign tax authorities; impacts from tax law changes; or change in judgment as to the realizability of deferred tax assets. The Company identifies items which are non-recurring in nature and treats these as discrete events. The tax effect of such items is recorded in the quarter in which the related events occur. Due to the volatility of these factors, the Company's consolidated effective income tax rate can change significantly quarter over quarter.
 
The Company conducts business globally and, as a result, the Company and its subsidiaries files income tax returns in the U.S. and in various state and foreign jurisdictions. In the normal course of business, the Company is subject to periodic examination in such domestic and foreign jurisdictions by tax authorities. The Company and certain subsidiaries are currently under audit in the U.S. for fiscal
2016.
While the amount of uncertain tax impacts with respect to the entities and years under audit
may
change within the next
twelve
months, it is
not
anticipated that any of the changes will be significant. It is reasonably possible that some of these audits
may
be completed during the next
twelve
months and that various issues relating to uncertain tax impacts will be resolved within the next
twelve
months as exams are completed or as statutes expire and will impact the effective tax rate.
 
We are subject to a U.S. federal statutory tax rate of
21%
for the fiscal year ending
June 30, 2020.
The Company’s consolidated effective tax rate was
24.4%
for the
three
months ended
September 30, 2019
compared with
24.9%
in the year ago
first
quarter. The current fiscal year’s effective tax rate primarily includes a provision for income tax on the taxable year’s income, tax expense on the maintenance of a valuation allowance on Canadian deferred tax assets and tax and interest expense on uncertain tax positions. The prior quarter’s effective tax rate primarily includes tax expense on the taxable year’s net income, tax expense on the cancelation of stock options and tax and interest expense on uncertain tax positions.