Income Taxes (Notes)

12 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

10.  INCOME TAXES

Federal and state income tax provisions are as follows:

	Year Ended September 30,
	2022		2021		2020
Federal:
Current	$	9,401	$	2	$	(39)
Deferred	3		11,678		9,317
State:
Current	3,445		4,505		3,657
Deferred	(34)		46		(4,195)
Total provision for income taxes	$	12,815	$	16,231	$	8,740

Actual income tax expense differs from income tax expense computed by applying the U.S. federal statutory corporate rate to income (loss) before income taxes as follows:

	Year Ended September 30,
	2022		2021		2020
Provision at the federal statutory rate	$	11,130	$	17,830	$	10,352
Increase resulting from:
Non-deductible expenses	471		658		1,974
State income taxes, net of federal deduction	2,114		3,876		2,662
Change in valuation allowance	283		—		—
Other	427		—		261
Decrease resulting from:
Share-based compensation	(665)		(715)		(75)
Change in valuation allowance	—		(118)		(3,334)
Contingent tax liabilities	(133)		(2,898)		(1,313)
Component 2 goodwill utilization	(812)		(2,241)		(1,787)
Other	—		(161)		—
Total provision for income taxes	$	12,815	$	16,231	$	8,740

Deferred income tax provisions result from temporary differences in the recognition of income and expenses for financial reporting purposes and for income tax purposes. The income tax effects of these temporary differences, representing deferred income tax assets and liabilities, result principally from the following:

	Year Ended September 30,
	2022		2021
Deferred income tax assets:
Allowance for credit losses	$	1,246	$	541
Accrued expenses	18,645		17,134
Net operating loss carryforward	4,542		6,445
Various reserves	1,318		1,285
Equity losses in affiliate	125		210
Share-based compensation	1,142		1,079
Capital loss carryforward	82		1
Lease asset	12,534		9,634
Other	4,236		2,914
Subtotal	43,870		39,243
Less valuation allowance	875		592
Total deferred income tax assets	42,995		38,651
Deferred income tax liabilities:
Property and equipment	126		509
Intangible assets	9,044		8,765
Lease liability	12,500		9,615
Other	806		753
Total deferred income tax liabilities	22,476		19,642
Net deferred income tax assets	$	20,519	$	19,009

In fiscal 2022 and 2021, the valuation allowance on our deferred tax assets increased by $283 and decreased by $118, respectively, which is included in “Provision (benefit) for income taxes” in our Consolidated Statements of Comprehensive Income.

As of September 30, 2022, we had available approximately $61,034 of federal net tax operating loss carry forward for federal income tax purposes, including $55,124 from net operating losses on which no tax benefit has been recognized and has not been recorded as a deferred tax asset. This carry forward, which may provide future tax benefits, will begin to expire in 2031. As of September 30, 2022, we had available approximately $71,723 state net tax operating loss carry forwards, including $5,520 from net operating losses on which no tax benefit has been recognized and has not been recorded as a deferred tax asset. The significant majority of these carry forwards, which may provide future tax benefits, will not begin to expire until 2026. We have provided valuation allowances on all net operating losses where it is determined it is more likely than not that they will expire without being utilized.

In assessing the realizability of deferred tax assets at September 30, 2022, we considered whether it was more likely than not that some portion or all of the deferred tax assets will not be realized. Our realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which these temporary differences become deductible. As a result, we have recorded a net deferred tax asset of $20,519 on our Consolidated Balance Sheets. We will continue to evaluate the appropriateness of our remaining deferred tax assets and need for valuation allowances on a quarterly basis.

GAAP requires financial statement reporting of the expected future tax consequences of uncertain tax return reporting positions on the presumption that all relevant tax authorities possess full knowledge of those tax reporting positions, as well as all of the pertinent facts and circumstances, but it prohibits discounting of any of the related tax effects for the time value of money. The evaluation of a tax position is a two-step process. The first step is the recognition process to determine if it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authority, based on the technical merits of the position. The second step is a measurement process whereby a tax position that meets the more likely than not recognition threshold is calculated to determine the amount of benefit/expense to recognize in the financial statements. The tax position is measured at the largest amount of benefit/expense that is more likely than not of being realized upon ultimate settlement.

A reconciliation of the beginning and ending balances of unrecognized tax benefit is as follows:

	Year Ended September 30,
	2022		2021
Balance at beginning of period	$	21,879	$	24,861
Additions for position related to current year	—		59
Additions for positions of prior years	26		20
Reduction resulting from the lapse of the applicable statutes of limitations	159		3,061
Balance at end of period	$	21,746	$	21,879

As of September 30, 2022 and 2021, $21,746 and $21,879, respectively, of unrecognized tax benefits would result in a decrease in the provision for income tax expense. We anticipate that approximately $172 in liabilities for unrecognized tax benefits, including accrued interest, primarily from net operating losses on which no tax benefit has been recognized, may be reversed in the next twelve months. The reversal is predominantly due to the expiration of the statutes of limitation for unrecognized tax benefits.

We had approximately $52 and $50 accrued for the payment of interest and penalties at September 30, 2022, and 2021, respectively. We recognize interest and penalties related to unrecognized tax benefits as part of the provision for income taxes.

The tax years ended September 30, 2019, and forward are subject to federal audit as are tax years prior to September 30, 2019, to the extent of unutilized net operating losses generated in those years. The tax years ended September 30, 2018, and forward are subject to state audits as are tax years prior to September 30, 2018, to the extent of unutilized net operating losses generated in those years.