INCOME TAXES

6 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

As of September 30, 2021 and March 31, 2021, the Company had $3.3 million and $3.1 million, respectively, of total gross unrecognized tax benefits including interest. Approximately $2.7 million and $2.6 million, respectively, represent the amount of net unrecognized tax benefits that are permanent in nature and, if recognized, would affect the annual effective tax rate. At September 30, 2021, approximately $0.7 million of gross unrecognized tax benefits are expected to be resolved during the next twelve months through the expiration of the statute of limitations and settlement with taxing authorities. The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. As of September 30, 2021, the Company had approximately $1.4 million accrued for gross interest, of which $118.4 thousand was accrued during the six months ended September 30, 2021.

The Company is subject to U.S. income taxes, as well as various other state and local jurisdictions. With the exception of a few states, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2016, although carryforward attributes that were generated prior to 2016 may still be adjusted upon examination by the taxing authorities if they either have been or will be used in a future period.

The Company’s effective income tax rate totaled 11.7% for the quarter ended September 30, 2021 compared to 21.9% for the prior year quarter. The decrease is primarily due to the permanent tax benefit related to non-qualified stock option exercises as a discrete item in the current quarter, the recognition of Federal Historic Tax Credits in the current quarter and lower than estimated Federal Historic Tax Credits for fiscal 2020 with the provision to return adjustment being treated as a discrete item in the prior year quarter. This was partially offset by an increase in the disallowed executive compensation under Section 162(m) in the current quarter and the recognition of the permanent tax benefit related to the exclusion of life insurance proceeds in the prior year quarter.