Income Taxes (Notes)

12 Months Ended

Sep. 30, 2023

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,
	2023		2022		2021
Federal:
Current	$	27,205	$	9,401	$	2
Deferred	4,300		3		11,678
State:
Current	6,370		3,445		4,505
Deferred	886		(34)		46
Total provision for income taxes	$	38,761	$	12,815	$	16,231

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,
	2023		2022		2021
Provision at the federal statutory rate	$	33,295	$	11,130	$	17,830
Increase resulting from:
Non-deductible expenses	2,017		1,610		1,086
State income taxes, net of federal deduction	6,338		2,114		3,876
Contingent tax liabilities	396		—		—
Change in valuation allowance	—		283		—
Other	—		427		—
Decrease resulting from:
Share-based compensation	(332)		(665)		(715)
Noncontrolling interest	(2,415)		(1,139)		(428)
Change in valuation allowance	(52)		—		(118)
Contingent tax liabilities	—		(133)		(2,898)
Component 2 goodwill utilization	—		(812)		(2,241)
Other	(486)		—		(161)
Total provision for income taxes	$	38,761	$	12,815	$	16,231

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:

	September 30,
	2023		2022
Deferred income tax assets:
Allowance for credit losses	$	349	$	1,246
Accrued expenses	18,167		18,645
Net operating loss carryforward	4,224		4,542
Various reserves	1,718		1,318
Equity losses in affiliate	—		125
Share-based compensation	1,298		1,142
Capital loss carryforward	—		82
Lease asset	14,207		12,534
Other	8,596		4,236
Subtotal	48,559		43,870
Less valuation allowance	823		875
Total deferred income tax assets	47,736		42,995
Deferred income tax liabilities:
Property and equipment	2,231		126
Intangible assets	9,984		9,044
Lease liability	14,102		12,500
Other	1,036		806
Total deferred income tax liabilities	27,353		22,476
Net deferred income tax assets	$	20,383	$	20,519

In fiscal 2023 and 2022, the valuation allowance on our deferred tax assets decreased by $52 and increased by $283, respectively, which is included in “Provision for income taxes” in our Consolidated Statements of Comprehensive Income.

As of September 30, 2023, we had available approximately $5,202 of federal net tax operating loss carry forward for federal income tax purposes. This carry forward, which may provide future tax benefits, is subject to an annual limitation of $709 under Section 382 of the Internal Revenue Code and will begin to expire in 2029. As of September 30, 2023, we had available approximately $70,216 state net tax operating loss carry forwards, including $4,965 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, 2023, 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 $20,383 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,
	2023		2022
Balance at beginning of period	$	21,746	$	21,879
Additions for positions of prior years	819		26
Reduction resulting from the lapse of the applicable statutes of limitations	(218)		(159)
Balance at end of period	$	22,347	$	21,746

As of September 30, 2023 and 2022, $22,347 and $21,746, respectively, of unrecognized tax benefits would result in a decrease in the provision for income tax expense. We anticipate that approximately $6,600 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 $697 and $52 accrued for the payment of interest and penalties at September 30, 2023 and 2022, 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, 2020, and forward are subject to federal audit as are tax years prior to September 30, 2020, to the extent of unutilized net operating losses generated in those years. The tax years ended September 30, 2019, and forward are subject to state audits as are tax years prior to September 30, 2019, to the extent of unutilized net operating losses generated in those years.