Income Taxes

9 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Tax Disclosure

Income Taxes

Effective Tax Rate

Our effective tax rates were 2.8% and 0.7% for the three and nine months ended March 31, 2023, compared to 0.4% and (7.8%) during the three and nine months ended March 31, 2022, respectively. The effective tax rates during fiscal 2023 were impacted by valuation allowances of $3.6 million and $13.3 million placed on deferred tax assets during the three and nine months ended March 31, 2023, respectively.

Valuation Allowance

We placed a valuation allowance on our deferred tax assets in the second quarter of fiscal 2022 due to the existence of a cumulative loss over a three-year period. We will continue to place valuation allowances on newly generated deferred tax assets and will realize the benefit associated with the deferred tax assets for which the valuation allowance has been provided to the extent we generate taxable income in the future, or cumulative losses are no longer present and our future projections for growth or tax planning strategies are demonstrated.

Net Operating Loss Carryback Refund

Through provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act (the "CARES Act"), we had an income tax benefit from the ability to carryback the fiscal 2021 federal net operating loss to a period with a higher statutory federal income tax rate. During the third quarter of fiscal 2023, we received a $13.3 million tax refund in connection with this carryback, which was included in income taxes receivable in the Condensed Consolidated Balance Sheet as of June 30, 2022.

Deferred Payroll Taxes

During the second quarter of fiscal 2023, we repaid the remaining $5.6 million of U.S. payroll taxes we deferred through provisions of the CARES Act. The balance of deferred payroll taxes was included within accrued wages and benefits in the Condensed Consolidated Balance Sheet as of June 30, 2022.