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INCOME TAXES
 12 Months Ended
Jul. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The sources of income before income taxes are as follows:
 For the Fiscal Year Ended July 31,
 202220212020
United States$1,359,841 $725,262 $258,483 
Foreign100,023 119,319 14,413 
Total$1,459,864 $844,581 $272,896 

The components of the provision for income taxes are as follows:
 For the Fiscal Year Ended July 31,
Income Taxes:202220212020
U.S. Federal$296,716 $148,706 $49,494 
U.S. state and local55,159 26,344 9,891 
Foreign17,848 17,571 1,842 
Total current expense369,723 192,621 61,227 
U.S. Federal(21,317)162 6,472 
U.S. state and local(2,089)(365)(197)
Foreign(24,696)(8,707)(15,990)
Total deferred expense (benefit)(48,102)(8,910)(9,715)
Total income tax expense$321,621 $183,711 $51,512 

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law. The CARES Act includes several changes impacting business, including, but not limited to, enhanced business interest deductibility, net operating loss ("NOL") carryback provisions, payroll tax deferral provisions and employee retention tax credits. The Company determined that the impacts of the CARES Act are not material to the Consolidated Financial Statements.

On March 11, 2021, the American Rescue Plan Act (the "Act") was signed into law. The Act includes several changes impacting business, including, but not limited to, insurance premium subsidies, extension of employee retention tax credits and amendments to deductible compensation. The Company determined that the impacts of the Act are not material to the Consolidated Financial Statements.

The differences between income tax expense at the federal statutory rate and the actual income tax expense are as follows:

 For the Fiscal Year Ended July 31,
 202220212020
Provision at federal statutory rate$306,571 $177,362 $57,308 
Differences between U.S. federal statutory and foreign tax rates58,573 (16,857)(50,898)
Foreign currency remeasurement (gains) losses(73,914)1,595 30,246 
U.S. state and local income taxes, net of federal benefit38,919 20,407 7,616 
Other(8,528)1,204 7,240 
Total income tax expense$321,621 $183,711 $51,512 
A summary of the deferred income tax balances is as follows:
 July 31,
 20222021
Deferred income tax asset (liability):
Inventory basis$6,596 $3,158 
Employee benefits10,171 10,485 
Self-insurance reserves6,792 6,949 
Accrued product warranties68,083 53,258 
Accrued incentives7,064 4,403 
Sales returns and allowances2,447 934 
Accrued expenses4,866 7,496 
Property, plant and equipment(44,508)(36,662)
Operating leases11,193 10,615 
Deferred compensation26,924 19,260 
Intangibles(219,726)(173,360)
Net operating loss and other carryforwards40,814 38,669 
Unrealized loss(17,925)609 
Unrecognized tax benefits4,013 3,946 
Other(6,155)(4,949)
Valuation allowance(8,630)(17,193)
Deferred income tax (liability), net$(107,981)$(72,382)

Deferred tax assets are reduced by a valuation allowance if, based upon available evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. The valuation allowances recorded at July 31, 2022 and July 31, 2021 relate to certain foreign net operating loss carry forwards and other assets in foreign jurisdictions.

With the exception of foreign subsidiary investment basis differences not attributable to un-repatriated foreign earnings, we consider all of our undistributed earnings of our foreign subsidiaries, as of July 31, 2022, to not be indefinitely reinvested outside of the United States. As of July 31, 2022, the related income tax cost of the repatriation of foreign earnings is not material.

As of July 31, 2022, the Company has $1,398 of U.S. state tax credit carry forwards that expire in fiscal 2032, which the Company expects to realize prior to expiration. At July 31, 2022, the Company had $81,626 of gross NOL carry forwards in certain foreign jurisdictions that will expire from fiscal 2023 to indefinite carryforward, of which $52,354 has been fully reserved with a valuation allowance and the remaining amount the Company expects to realize. In addition, the Company has $5,033 of gross U.S. state tax NOL carryforwards that expire from fiscal 2023 to 2042 that the Company does not expect to realize and therefore has been fully reserved with a valuation allowance.

The benefits of tax positions reflected on income tax returns but whose outcome remains uncertain are only recognized for financial accounting purposes if they meet minimum recognition thresholds. The total amount of unrecognized tax benefits that, if recognized, would have impacted the Company’s effective tax rate were $14,461 for fiscal 2022, $13,631 for fiscal 2021 and $11,606 for fiscal 2020.
Changes in the unrecognized tax benefit during fiscal years 2022, 2021 and 2020 were as follows:
 
202220212020
Beginning balance$17,025 $14,238 $13,848 
Tax positions related to prior years:
Additions705 72 73 
Reductions(1,280)(277)(129)
Tax positions related to current year:
Additions4,660 4,346 1,966 
Settlements(2,453)(3,363)— 
Lapses in statute of limitations(3,010)(2,701)(1,520)
Tax positions acquired2,351 4,710 — 
Ending balance$17,998 $17,025 $14,238 

It is the Company’s policy to recognize interest and penalties accrued relative to unrecognized tax benefits in income tax expense. The total amount of liabilities accrued for interest and penalties related to unrecognized tax benefits as of July 31, 2022 and July 31, 2021 were $2,867 and $2,967, respectively. The total amount of interest and penalties expense recognized in the Consolidated Statements of Income and Comprehensive Income for the fiscal years ended July 31, 2022, July 31, 2021 and July 31, 2020 were $134, $238 and $544, respectively.

The total unrecognized tax benefits above, along with the related accrued interest and penalties, are reported within the liability section of the Consolidated Balance Sheets. A portion of the unrecognized tax benefits is classified as short-term and is included in the “Income and other taxes” line of the Consolidated Balance Sheets, while the remainder is classified as a long-term liability.

The components of total unrecognized tax benefits are summarized as follows:
 July 31,
 20222021
Unrecognized tax benefits$17,998 $17,025 
Reduction to unrecognized tax benefits which offset tax credit and loss carryforwards(668)(725)
Accrued interest and penalties2,867 2,967 
Total unrecognized tax benefits$20,197 $19,267 
Short-term, included in “Income and other taxes”$2,954 $3,423 
Long-term17,243 15,844 
Total unrecognized tax benefits$20,197 $19,267 

The Company anticipates a decrease of approximately $4,100 in unrecognized tax benefits and $900 in interest during fiscal 2023 from expected settlements or payments of uncertain tax positions and lapses of the applicable statutes of limitations. Actual results may differ from these estimates.

The Company files income tax returns in the U.S. federal jurisdiction and in many U.S. state and foreign jurisdictions. The Company is currently under exam by certain U.S. state tax authorities for the fiscal years ended July 31, 2018 through July 31, 2020 and by certain foreign jurisdictions for fiscal years ended 2016 through 2019. The Company believes it has adequately reserved for its exposure to additional payments for uncertain tax positions in its liability for unrecognized tax benefits.
 
The major tax jurisdictions we file in, with the years still subject to income tax examinations, are listed below:
 
Major Tax JurisdictionTax Years Subject to Exam
United States – FederalFiscal 2019 – Fiscal 2021
United States – StateFiscal 2019 – Fiscal 2021
GermanyFiscal 2016 – Fiscal 2020
FranceFiscal 2019 – Fiscal 2021
ItalyFiscal 2017 – Fiscal 2021
United KingdomFiscal 2021