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Income Taxes
 12 Months Ended
Jun. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
Earnings before income taxes shown below are based on the geographic location to which such earnings are attributable.
Years ended June 30,202320222021
Earnings before income taxes:
United States$4,091.4 $3,461.8 $3,010.9 
Foreign346.2 342.3 350.3 
$4,437.6 $3,804.1 $3,361.2 

The provision (benefit) for income taxes consists of the following components:
Years ended June 30,202320222021
Current:
Federal$840.0 $620.7 $749.3 
Foreign104.6 97.5 121.9 
State161.1 100.4 142.6 
Total current1,105.7 818.6 1,013.8 
Deferred:
Federal(77.4)20.7 (182.6)
Foreign4.3 (12.9)(19.1)
State(7.0)28.8 (49.4)
Total deferred(80.1)36.6 (251.1)
Total provision for income taxes$1,025.6 $855.2 $762.7 

A reconciliation between the Company's effective tax rate and the U.S. federal statutory rate is as follows:
Years ended June 30,2023%2022%2021%
Provision for taxes at U.S. statutory rate$931.9 21.0 $798.9 21.0 $705.9 21.0 
Increase/(decrease) in provision from:
State taxes, net of federal tax benefit111.2 2.5 91.8 2.4 67.2 2.0 
Foreign rate differential33.1 0.7 41.3 1.1 34.0 1.0 
Excess tax benefit - Stock-based compensation(19.0)(0.4)(19.9)(0.5)(8.8)(0.2)
Other(31.6)(0.7)(56.9)(1.5)(35.6)(1.1)
$1,025.6 23.1 $855.2 22.5 $762.7 22.7 

The effective tax rate in fiscal 2023 and 2022 was 23.1% and 22.5%, respectively. The increase in the effective tax rate is primarily due to an intercompany transfer of certain assets that resulted in a lower effective tax rate in fiscal 2022 and higher reserves for uncertain tax positions in fiscal 2023.

The effective tax rate for fiscal 2022 and 2021 was 22.5% and 22.7%, respectively. The decrease in the effective tax rate is primarily due to a favorable earnings mix, lower reserves for uncertain tax positions, and an intercompany transfer of certain assets in fiscal 2022, partially offset by favorable adjustments to prior year tax liabilities and a foreign tax election in fiscal 2021.
The significant components of deferred income tax assets and liabilities and their balance sheet classifications are as follows:
Years ended June 30,20232022
Deferred tax assets:
Accrued expenses not currently deductible$209.5 $212.1 
Stock-based compensation expense48.8 43.5 
Foreign tax credits13.3 5.9 
Fixed and intangible assets 108.2 — 
Net operating losses37.5 34.1 
Prepaid royalty18.0 33.7 
Unrealized investment losses, net519.5 407.2 
Other39.9 38.3 
994.7 774.8 
Less: valuation allowances(18.6)(18.9)
Deferred tax assets, net$976.1 $755.9 
Deferred tax liabilities:
Deferred revenue$578.1 $529.9 
Fixed and intangible assets— 6.5 
Prepaid expenses78.9 94.8 
Prepaid retirement benefits30.8 4.6 
Tax on unrepatriated earnings10.1 11.5 
Other20.7 18.2 
Deferred tax liabilities718.6 665.5 
Net deferred tax (assets)/liabilities$(257.5)$(90.4)

There are $331.1 million and $157.4 million of long-term deferred tax assets included in other assets on the Consolidated Balance Sheets at June 30, 2023 and 2022, respectively.

Income taxes have not been provided on undistributed earnings of certain foreign subsidiaries in an aggregate amount of approximately $53.1 million as the Company considers such earnings to be permanently reinvested outside of the United States. As of June 30, 2023, it is not practicable to estimate the unrecognized tax liability that would occur upon distribution.

The Company has estimated foreign net operating loss carry-forwards of approximately $78.1 million as of June 30, 2023, of which $1.3 million expire through June 2033 and $76.8 million have an indefinite utilization period. As of June 30, 2023, the Company has approximately $19.0 million of federal net operating loss carry-forwards from acquired companies. The net operating losses have an annual utilization limitation pursuant to section 382 of the Internal Revenue Code and expire through June 2036.

The Company has state net operating loss carry-forwards of approximately $173.3 million as of June 30, 2023, which expire through June 2042. The Company has recorded valuation allowances of $18.6 million and $18.9 million at June 30, 2023 and 2022, respectively, to reflect the estimated amount of domestic and foreign deferred tax assets that may not be realized.

Income tax payments were approximately $1,080.7 million, $856.8 million, and $973.7 million for fiscal 2023, 2022, and 2021, respectively.

As of June 30, 2023, 2022, and 2021 the Company's liabilities for unrecognized tax benefits, which include interest and penalties, were $116.9 million, $98.1 million, and $99.9 million respectively. The amount that, if recognized, would impact the effective tax rate is $83.6 million, $68.1 million, and $68.5 million, respectively. The remainder, if recognized, would principally impact deferred taxes.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
202320222021
Unrecognized tax benefits at beginning of the year$98.1 $99.9 $62.3 
Additions for tax positions11.3 8.0 18.8 
Additions for tax positions of prior periods16.8 11.6 32.5 
Reductions for tax positions of prior periods(5.0)(8.5)(11.0)
Settlement with tax authorities(1.8)(2.0)(1.3)
Expiration of the statute of limitations(1.0)(9.2)(1.5)
Impact of foreign exchange rate fluctuations(1.5)(1.7)0.1 
Unrecognized tax benefit at end of year$116.9 $98.1 $99.9 

Interest expense and penalties associated with uncertain tax positions have been recorded in the provision for income taxes on the Statements of Consolidated Earnings. During the fiscal years 2023, 2022, and 2021, the Company recorded interest expense of $9.1 million, $3.5 million, and $10.8 million, respectively. Penalties recorded during fiscal years 2023 and 2021 were not significant. During fiscal year 2022, the Company recorded penalties of $0.3 million.

At June 30, 2023, the Company had accrued interest of $30.0 million recorded on the Consolidated Balance Sheets within other liabilities. At June 30, 2022, the Company had accrued interest of $21.9 million recorded on the Consolidated Balance Sheets, of which $4.5 million was recorded within income taxes payable, and the remainder was recorded within other liabilities. At June 30, 2023 and June 30, 2022, the Company’s accrued penalties recorded on the Consolidated Balance Sheets within other liabilities were not material. At June 30, 2022, the Company's accrued penalties of $0.3 million, were recorded on the Consolidated Balance Sheets within income taxes payable.

The Company is routinely examined by the IRS and tax authorities in foreign countries in which it conducts business, as well as tax authorities in states in which it has significant business operations. The tax years currently under examination vary by jurisdiction. Examinations in progress in which the Company has significant business operations are as follows:
Taxing JurisdictionFiscal Years under Examination
U.S. (IRS)
2023
Arizona
2016 - 2020
Illinois
2019 - 2020
Massachusetts
 2016 - 2020
New York City
2016 - 2021
New York State
2016 - 2019
India
   2014 - 2018, 2020 - 2021

The Company regularly considers the likelihood of assessments resulting from examinations in each of the jurisdictions. The resolution of tax matters is not expected to have a material effect on the consolidated financial condition of the Company, although a resolution could have a material impact on the Company's Statements of Consolidated Earnings for a particular future period and on the Company's effective tax rate.
If certain pending tax matters settle within the next twelve months, the total amount of unrecognized tax benefits may increase or decrease for all open tax years and jurisdictions. Based on current estimates, the Company is not projecting any settlements. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. We continually assess the likelihood and amount of potential adjustments and adjust the income tax provision, the current tax liability and deferred taxes in the period in which the facts that give rise to a revision become known.