Note 16 - Income Taxes

9 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE 16 – INCOME TAXES

The Company's effective income tax rate is based on expected income, statutory rates and tax planning opportunities available in the various jurisdictions in which it operates. For interim financial reporting, the Company estimates the annual income tax rate based on projected taxable income for the full year and records a quarterly income tax provision or benefit in accordance with the anticipated annual rate. The Company refines the estimates of the year's taxable income as new information becomes available, including actual year-to-date financial results. This continual estimation process often results in a change to the expected effective income tax rate for the year. When this occurs, the Company adjusts the income tax provision during the quarter in which the change in estimate occurs so that the year-to-date provision reflects the expected income tax rate. Significant judgment is required in determining the effective tax rate and in evaluating tax positions.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in March 2020. The CARES Act allowed the Company to carry back a federal net operating loss to prior tax years, offset taxable income in those earlier tax years and request a refund of income taxes that were paid at a higher statutory tax rate. The Company recognized tax benefits of $0.3 million in the third quarter of fiscal 2020 and $0.4 million in the first quarter of fiscal 2021 for utilizing the net operating losses in the prior tax years. The Company sold its North Canton, Ohio facility in the third quarter of fiscal 2020 which generated a capital gain and allowed the Company to utilize a capital loss carryforward. The resulting tax benefit reduced the anticipated full year fiscal 2020 estimated effective income tax rate.

	Three Months Ended						Nine Months Ended
	March 31						March 31
	2021			2020			2021			2020
Reconciliation of effective tax rate:
Provision for income taxes at the anticipated annual tax rate		23.8	%		10.8	%		24.3	%		16.7	%
Uncertain tax positions		0.8			1.5			(1.3	)		(0.3	)
Tax rate changes		-			(16.7	)		(5.0	)		(2.5	)
Shared-based compensation		1.8			4.4			1.1			3.7
Effective tax rate		26.4	%		-	%		19.1	%		17.6	%