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Income Taxes
 12 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company’s income before income taxes consisted of the following:
Year Ended March 31,
202220212020
Domestic income before income taxes$309,918 $190,459 $138,537 
Foreign income before income taxes3,758 2,743 2,207 
Total income before income taxes
$313,676 $193,202 $140,744 

Components of income tax expense consist of the following:
Year Ended March 31,
202220212020
Current:
Federal$36,206 $14,121 $4,885 
State and local5,676 2,513 754 
Foreign597 756 400 
Total current income tax expense
$42,479 $17,390 $6,039 
Deferred:
Federal$19,947 $7,245 $6,589 
State and local3,893 (211)1,315 
Foreign104 (7)25 
Total deferred income tax expense
23,944 7,027 7,929 
Total income tax expense
$66,423 $24,417 $13,968 
A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate is as follows:
Year Ended March 31,
202220212020
Federal tax at statutory rate21.0 %21.0 %21.0 %
State income taxes, net of federal benefit3.3 %0.6 %1.7 %
Non-controlling interest(6.8)%(7.6)%(9.8)%
Valuation allowance4.6 %(1.0)%(0.9)%
Other(0.9)%(0.4)%(2.1)%
Effective tax rate21.2 %12.6 %9.9 %

The significant components of deferred tax assets and liabilities are as follows:
Year Ended March 31,
20222021
Deferred tax assets:
Basis difference in HLA$260,766 $248,586 
Tax Receivable Agreement49,979 48,480 
Fixed assets48 42 
Net operating loss carryforwards1,126 983 
Valuation allowance(67,578)(46,728)
State taxes717 586 
Other(12)— 
Total deferred tax assets
$245,046 $251,949 

As of March 31, 2022 and 2021, the Company had net operating loss carryforwards of $4,817 and $5,045. These net operating losses can be carried forward indefinitely. As of March 31, 2022 and 2021, it is more likely than not that the tax benefits from certain of these net operating loss carryforwards will not be realized, therefore, a valuation allowance of $416 and $176 has been established, respectively.

In connection with the offering in fiscal 2022 and related unit exchanges, the Company recorded a deferred tax asset in the amount of $16,996, which is net of a valuation allowance of $2,786 related to the portion of tax benefits that it is more likely than not will not be realized. Additionally, in connection with recording the deferred tax asset for the fiscal 2022 offering and related unit exchanges, the Company recorded a payable to related parties pursuant to the tax receivable agreement of $14,277.

The Company believes it is more likely than not that the deferred tax assets (except those identified above) will be realized based on the Company’s historic earnings, forecasted income, and the reversal of temporary differences.  The net change in the valuation allowance was an increase of $20,850, which was recorded through additional paid-in-capital and income tax expense.

As of March 31, 2022, 2021, and 2020, the Company had no unrecognized tax positions. The Company does not expect any material increase or decrease in its gross unrecognized tax positions during the next twelve months. If and when the Company does record unrecognized tax positions in the future, any interest and penalties related to unrecognized tax positions will be recorded in the income tax expense line in the Consolidated Statements of Income.
The Company files income tax returns as required by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company may be subject to examination by federal and certain state and local tax authorities. As of March 31, 2022, the Company’s income tax returns from 2018 remain open and are subject to examination.

Tax Receivable Agreement

The Company has recorded a liability related to the TRA of $180,536 and $194,764 as of March 31, 2022 and 2021. Payments of $23,170 and $6,894 were made during the years ended March 31, 2022 and 2021, respectively. During the year ended March 31, 2022, the Company determined to make lump sum payments to certain TRA participants to terminate their right to receive future payments, as permitted by the TRA. As a result of the early termination payments, the Company recognized a gain of $4,319 during the year ended March 31, 2022 that is recorded in non-operating income in the Consolidated Statement of Income. In the event that the valuation allowance related to tax benefits associated with the tax receivable agreement is released in a future period, an additional estimated payable will be due to the TRA Recipients of $11,333.