Note 3 - Income Taxes
|3 Months Ended|
Sep. 30, 2018
|Notes to Financial Statements|
|Income Tax Disclosure [Text Block]||
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. from
2016.While the amount of uncertain tax impacts with respect to the entities and years under audit
maychange within the next
twelvemonths, it is
notanticipated that any of the changes will be significant. It is reasonably possible that some of these audits
maybe completed during the next
twelvemonths and that various issues relating to uncertain tax impacts will be resolved within the next
twelvemonths as exams are completed or as statutes expire and will impact the effective tax rate.
The Company’s consolidated effective tax rate was
September 30, 2018and
September 30, 2017.The current period’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. The prior period’s effective tax rate primarily includes tax expense on the taxable year’s net income, and tax and interest expense on uncertain tax positions partially offset by the tax benefit on the vesting of restricted stock units.
December 22, 2017H.R.
1,originally known as the Tax Cuts and Jobs Act, (the “Tax Act”) was enacted. Among the significant changes to the U.S. Internal Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate (“Federal Tax Rate”) from
January 1, 2018,introduces a limitation on the deduction of certain interest expenses, introduces a deduction for certain business capital expenditures and introduces a system of taxing foreign-sourced income from multinational corporations. The Company computed its income tax expense for the
June 30, 2018fiscal year using a blended Federal Tax Rate of
21%Federal Tax Rate will apply to fiscal years ending
June 30, 2019and each year thereafter. Following is a reconciliation of income tax expense (benefit) computed by applying the federal statutory income tax rate to income before taxes to actual tax expense (benefit):
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://fasb.org/us-gaap/role/ref/legacyRef