Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES Geographic Sources of Income Before Income Taxes
Components of Income Tax Benefit (Provision)
Reconciliation of the U.S. Statutory Tax Rate to Annual Effective (Benefit) Tax Rate
Our income taxes for 2016 were favorably impacted by (i) a benefit of $20.8 million, including interest of $0.6 million, primarily related to a lapse of statutes of limitations, (ii) $6.7 million of WOTC related to new hires in 2016, (iii) $5.1 million of WOTC from the retroactive reinstatement of the WOTC for calendar year 2015, (iv) $2.2 million in benefits resulting from the adoption of ASU 2016-09, and (v) $1.2 million of tax deductions for energy efficient government buildings. The effective tax rates on income from continuing operations for 2015 and 2014 were 25.3% and 39.5%, respectively. The effective tax rate for 2015 was lower than the rate for 2014 principally due to (i) $2.8 million of WOTC from the retroactive reinstatement of the WOTC for calendar year 2014, (ii) $2.0 million of tax deductions for energy efficient government buildings, (iii) $1.6 million of state employment-based tax credits, and (iv) $1.6 million of tax benefits related to a lapse of statutes of limitations. Components of Deferred Tax Assets and Liabilities
Operating Loss Carryforwards Operating loss carryforwards totaling $8.7 million at October 31, 2016 are being carried forward in a number of state jurisdictions where we are permitted to use tax operating losses from prior periods to reduce future taxable income. These operating losses will expire between 2017 and 2036. The valuation allowance represents the amount of tax benefits related to state net operating loss carryforwards that are not likely to be realized. We believe the remaining net deferred tax assets are more likely than not to be realizable based on estimates of future taxable income. Changes to the Deferred Tax Asset Valuation Allowance
Unrecognized Tax Benefits At October 31, 2016, 2015, and 2014, there were $52.0 million, $75.6 million, and $78.6 million, respectively, of unrecognized tax benefits that if recognized in the future, would impact our effective tax rate. We estimate that a decrease in unrecognized tax benefits of up to approximately $17 million is reasonably possible over the next twelve months due to the resolution of certain tax matters. At October 31, 2016 and 2015, accrued interest and penalties were $2.3 million and $3.2 million, respectively. For interest and penalties in 2016, 2015, and 2014, we recognized a benefit of $0.9 million and expense of $1.0 million and $0.9 million, respectively. Reconciliation of Total Unrecognized Tax Benefits
Jurisdictions We conduct business in all 50 states, significantly in California, Texas, and New York, as well as in various foreign jurisdictions. Our most significant income tax jurisdiction is the United States. Tax Years Open for Examination, by Entity
(1) We are currently being examined by the taxing authorities in the states of Alabama, Arizona, Connecticut, New Jersey, North Carolina, and Tennessee. |