Provision for Income Taxes

6 Months Ended

Jan. 31, 2023

Income Tax Disclosure [Abstract]

Provision for Income Taxes

Provision for Income Taxes

The overall effective income tax rate for the three months ended January 31, 2023 was 21.1%, and the effective income tax rate for the six months ended January 31, 2023 was 23.0%. These rates were both favorably impacted by certain foreign rate differences and mix of earnings between foreign and domestic operations which include certain interest income not subject to corporate income tax. The tax rate for the six-month period includes an unfavorable impact from the vesting of share-based compensation awards.

The overall effective income tax rate for the three months ended January 31, 2022 was 23.3%, and the effective income tax rate for the six months ended January 31, 2022 was 22.6%. These rates were both favorably impacted by certain foreign rate differences which include certain interest income not subject to corporate income tax and for the six-month period, the tax rate was favorably impacted from the vesting of share-based compensation awards.

Within the next 12 months, the Company anticipates a decrease of approximately $1,700 in unrecognized tax benefits, and $300 in accrued interest related to unrecognized tax benefits recorded as of January 31, 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 foreign jurisdictions for fiscal years ended 2016 through 2019. For U.S. federal income tax purposes, fiscal years 2019 through 2021 remain open and could be subject to examination. In major state jurisdictions, fiscal years 2019 through 2021 remain open and could be subject to examination. In major foreign jurisdictions, fiscal years 2016 through 2021 remain open and subject to examination. The Company believes it has adequately reserved for its exposure to additional payments for uncertain tax positions in its liability for unrecognized tax benefits.