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Income Taxes
9 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The Company’s income tax expense for the three and nine months ended June 30, 2020 was $149.5 million and $377.6 million, respectively, compared to $153.1 million and $350.5 million in the prior year periods. The effective tax rate was 19.1% and 19.6% for the three and nine months ended June 30, 2020, respectively, compared to 24.4% and 23.9% in the prior year periods. The effective tax rate for the three and nine months ended June 30, 2020 includes a tax benefit of $38.1 million and $77.6 million, respectively, from the enactment of the Taxpayer Certainty and Disaster Tax Relief Act of 2019 (the Act). The Act retroactively reinstated the federal energy efficient homes tax credit that expired on December 31, 2017 to homes closed from January 1, 2018 to December 31, 2020. The effective tax rates for all periods include an expense for state income taxes, reduced by tax benefits related to stock-based compensation.

The Company’s deferred tax assets, net of deferred tax liabilities, were $172.2 million at June 30, 2020 compared to $181.8 million at September 30, 2019. The Company has a valuation allowance of $13.6 million at June 30, 2020 and $18.7 million at September 30, 2019 related to state deferred tax assets for net operating loss (NOL) carryforwards that are more likely than not to expire before being realized. The Company will continue to evaluate both the positive and negative evidence in determining the need for a valuation allowance with respect to the remaining state NOL carryforwards. Any reversal of the valuation allowance in future periods will impact the Company’s effective tax rate.

The accounting for deferred taxes is based upon estimates of future results. Differences between the anticipated and actual outcomes of these future results could have a material impact on the Company’s consolidated results of operations or financial position. Also, changes in existing federal and state tax laws and tax rates could affect future tax results and the valuation of the Company’s deferred tax assets.