Income Taxes

12 Months Ended

Oct. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The following table provides a reconciliation of our effective tax rate from the federal statutory tax rate for the fiscal years ended October 31, 2023, 2022, and 2021 ($ amounts in thousands):

	2023		2022		2021
	$	%*	$	%*	$	%*
Federal tax provision at statutory rate	386,898	21.0	357,782	21.0	231,066	21.0
State tax provision, net of federal benefit	90,698	4.9	75,465	4.4	50,153	4.6
Other permanent differences	(2,782)	(0.2)	4,386	0.3	8,388	0.8
Reversal of accrual for uncertain tax positions	(621)	—	(1,690)	(0.1)	(993)	(0.1)
Accrued interest on anticipated tax assessments	403	—	234	—	297	—
Increase in unrecognized tax benefits	2,209	0.1	658	—	—	—
Excess stock compensation benefit	(7,320)	(0.4)	(3,012)	(0.2)	(4,698)	(0.4)
Energy tax credits	(2,348)	(0.1)	(22,153)	(1.3)	(24,343)	(2.2)
Other	3,163	0.2	5,556	0.3	6,818	0.6
Income tax provision*	470,300	25.5	417,226	24.5	266,688	24.2

*    Due to rounding, percentages may not add

We are subject to state tax in the jurisdictions in which we operate. We estimate our state tax liability based upon the individual taxing authorities’ regulations, estimates of income by taxing jurisdiction, and our ability to utilize certain tax-saving strategies. Based on our estimate of the allocation of income or loss among the various taxing jurisdictions and changes in tax regulations and their impact on our tax strategies, we estimate that our rate for state income taxes, before federal benefit, will be 6.2% in fiscal 2023. Our state income tax rate, before federal benefit, was 5.6% and 5.8% in fiscal 2022 and 2021, respectively

The following table provides information regarding the provision (benefit) for income taxes for each of the fiscal years ended October 31, 2023, 2022, and 2021 (amounts in thousands):

	2023		2022		2021
Federal	$	385,650	$	343,524	$	213,314
State	84,650		73,702		53,374
	$	470,300	$	417,226	$	266,688
Current	$	433,837	$	513,075	$	254,873
Deferred	36,463		(95,849)		11,815
	$	470,300	$	417,226	$	266,688

The components of income taxes payable at October 31, 2023 and 2022 are set forth below (amounts in thousands):

	2023		2022
Current	$	5,978	$	168,548
Deferred	160,290		122,931
	$	166,268	$	291,479

The following table provides a reconciliation of the change in the unrecognized tax benefits for the years ended October 31, 2023, 2022, and 2021 (amounts in thousands):

	2023		2022		2021
Balance, beginning of year	$	4,922	$	5,780	$	6,591
Increase in benefit as a result of tax positions taken in prior years	3,633		296		624
Increase in benefit as a result of tax positions taken in current year	2,733		833		—
Decrease in benefit as a result of lapse of statute of limitations	(776)		(1,987)		(1,435)
Balance, end of year	$	10,512	$	4,922	$	5,780

The statute of limitations has expired on our federal tax returns for fiscal years through 2019. The statute of limitations for our major state tax jurisdictions remains open for examination for fiscal year 2018 and subsequent years.

Our unrecognized tax benefits are included in the current portion of “Income taxes payable” on our Consolidated Balance Sheets. If these unrecognized tax benefits reverse in the future, they would have a beneficial impact on our effective tax rate at that time. During the next 12 months, it is reasonably possible that the amount of unrecognized tax benefits will change, but we are not able to provide a range of such change. The anticipated changes will be principally due to the expiration of tax statutes, settlements with taxing jurisdictions, increases due to new tax positions taken, and the accrual of estimated interest and penalties.

The amounts accrued for interest and penalties are included in the current portion of “Income taxes payable” on our Consolidated Balance Sheets. The following table provides information as to the amounts recognized in our tax provision, before reduction for applicable taxes and reversal of previously accrued interest and penalties, of potential interest and penalties in each of the three fiscal years ended October 31, 2023, 2022, and 2021, and the amounts accrued for potential interest and penalties at October 31, 2023 and 2022 (amounts in thousands):

Expense recognized in the Consolidated Statements of Operations and Comprehensive Income
Fiscal year
2023	$	332
2022	$	296
2021	$	376

Accrued at:
October 31, 2023	$	1,259
October 31, 2022	$	1,157

The components of net deferred tax assets and liabilities at October 31, 2023 and 2022 are set forth below (amounts in thousands):

	2023		2022
Deferred tax assets:
Accrued expenses	$	48,088	$	50,164
Impairment charges	25,005		37,418
Inventory valuation differences	20,690		41,154
Stock-based compensation expense	12,603		17,064
Amounts related to unrecognized tax benefits	1,385		203
State tax, net operating loss carryforwards	11,129		24,185
Other	1,709		1,691
Total assets	120,609		171,879
Deferred tax liabilities:
Capitalized interest	22,909		26,791
Deferred income	223,225		226,929
Expenses taken for tax purposes not for book	3,143		2,961
Depreciation	14,484		19,391
Deferred marketing	17,138		18,738
Total liabilities	280,899		294,810
Net deferred tax liabilities	$	(160,290)	$	(122,931)

In accordance with GAAP, we assess whether a valuation allowance should be established based on our determination of whether it is more-likely-than-not that some portion or all of the deferred tax assets would not be realized. At October 31, 2023 and 2022, we determined that it was more-likely-than-not that our deferred tax assets would be realized. Accordingly, at October 31, 2023 and 2022, we did not have valuation allowances recorded against our federal or state deferred tax assets.

We file tax returns in the various states in which we do business. Each state has its own statutes regarding the use of tax loss carryforwards. Some of the states in which we do business do not allow for the carryforward of losses, while others allow for carryforwards ranging from five years to an indefinite carryforward period.