Income Taxes

3 Months Ended

Nov. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXESIncome tax expense is based on taxable income determined in accordance with current enacted laws and tax rates. Deferred income taxes are recorded for the temporary differences between the financial statement and the tax bases of assets and liabilities using currently enacted tax rates.

Income Tax Provision and Effective Tax Rate

The provision for income taxes and effective tax rate are as follows:

	Three Months Ended
	November 30,
(in thousands)	2022			2021
Income before income taxes	$	157,885		$	119,930
Provision for income taxes	$	21,087		$	12,283
Effective tax rate	13.4		%	10.2		%

Our effective tax rate is based on recurring factors and non-recurring events, including the taxation of foreign income. Our effective tax rate will vary based on, among other things, changes in levels of foreign income, as well as discrete and other non-recurring events that may not be predictable. For the three months ended November 30, 2022, our effective tax rate is lower than the applicable U.S. corporate income tax rate mainly due to research and development ("R&D") tax credits, a foreign derived intangible income ("FDII") deduction and a tax benefit from the exercise of stock options.

For the three months ended November 30, 2022, the provision for income taxes was $21.1 million, compared with $12.3 million for the same period a year ago. The provision increased mainly due to higher pretax income at a higher effective tax rate and, to a lesser extent, an increase of the UK statutory tax rate.