Income Taxes

3 Months Ended

Jul. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our consolidated interim effective tax rate is based on our expected annual operating income, statutory tax rates, and income tax laws in the various jurisdictions where we operate. Significant or unusual items, including adjustments to accruals for tax uncertainties, are recognized in the fiscal quarter in which the related event or a change in judgment occurs. The expected effective tax rate on ordinary income for the fiscal year is 24.2%, which is greater than the U.S. federal statutory rate of 21.0%, due to state taxes and effects of foreign operations, partially offset by the impact of the foreign-derived intangible income deduction.

The effective tax rate of 23.6% for the three months ended July 31, 2022, is lower than the expected tax rate of 24.2% on ordinary income for the full fiscal year, primarily due to (a) the reversal of a valuation allowance and (b) a prior fiscal year true-up, partially offset by the addition of a tax contingency. The effective tax rate of 23.6% for the three months ended July 31, 2022, was lower than the effective tax rate of 28.5% for the same period last year, primarily reflecting (a) a decrease in prior fiscal year true-ups, (b) decreased impact of foreign tax rate changes, and (c) the reversal of a valuation allowance in the current period.