Income Taxes

The following table presents the Company’s provision for income taxes and effective income tax rate for the periods below:



	Three months ended February 28,						Six months ended February 28,
	2018			2017			2018			2017
Provision for income taxes	$	(13,686	)	$	4,699		$	(9,961	)	$	11,938
Effective income tax rate	(231.1		)%	30.0		%	(47.3		)%	33.1		%

The lower effective income tax rate during the second quarter and first six months of fiscal year 2018 was due primarily to the recognition of the impacts of the Tax Cuts and Jobs Act (“TCJA”) discussed below.

On December 22, 2017, the TCJA was signed into law, significantly impacting several sections of the Internal Revenue Code. The most significant impacts on the Company for fiscal year 2018 include:


•	Effective January 1, 2018, the U.S. corporate federal statutory income tax rate was reduced from 35% to 21%. Because of our fiscal year end, the Company's statutory federal tax rate is 25.7% for fiscal year 2018 and 21% for fiscal year 2019 and thereafter.


•	The Company remeasured its existing deferred tax assets and liabilities at the rate the Company expects to be in effect when those deferred taxes will be realized (either 25.7% if in 2018 or 21.0% thereafter). The Company recognized a discrete benefit from the deferred tax remeasurement of approximately $14.1 million in the second quarter of fiscal year 2018.

In December 2017, the SEC provided guidance allowing registrants to record provisional amounts, during a specified measurement period, when the necessary information is not available, prepared or analyzed in reasonable detail to account for the impact of the TCJA. Accordingly, we have reported the revaluation of our deferred tax assets and liabilities based on provisional amounts.

Among the factors that could affect the accuracy of our provisional amounts is uncertainty about the statutory tax rate applicable to our deferred income tax assets and liabilities, since the actual rate will be dependent on the timing of realization or settlement of such assets and liabilities. At February 28, 2018, we estimated the dates when such realization or settlement would occur. The actual dates when such realization or settlement occurs may be significantly different from our estimates, which could result in the ultimate revaluation of our deferred income taxes to be different from our provisional amounts. In addition, there is uncertainty about the impact of expected Internal Revenue Service guidance intended to interpret the most complex provisions of the TCJA.

The difference between our U.S. federal statutory income tax rate and our effective income tax rate for the six months ended February 28, 2018 and 2017 is summarized below:



	Six months ended February 28, 2018		Six months ended February 28, 2017
U.S. federal statutory income tax rate	25.7	%	35.0	%
State income taxes, net of federal tax benefit	3.9	%	2.9	%
Federal tax benefit of statutory tax deduction	(1.5	)%	(1.4	)%
Employment related and other tax credits, net	(1.6	)%	(1.7	)%
Stock option excess tax benefit	(6.6	)%	(2.1	)%
Deferred tax revaluation	(67.0	)%	—	%
Other	(0.2	)%	0.4	%
Effective tax rate	(47.3	)%	33.1	%