Income Taxes (Tables)

12 Months Ended

Sep. 30, 2019

Schedule of components of income tax expense (benefit)

The Company's (benefit) expense from income taxes from continuing operations consists of the following for the periods presented:



	Fiscal Year Ended September 30,
in thousands	2019			2018			2017
Current federal ^(a)	$	(4,935	)	$	57		$	—
Current state	693			512			859
Deferred federal ^(b)	(31,291		)	102,082			1,625
Deferred state ^(c)	(1,684		)	(8,167		)	212
Total (benefit) / expense	$	(37,217	)	$	94,484		$	2,696

^(a) Fiscal 2019 federal current benefit is primarily driven by the expected refund of half of our outstanding minimum tax credit balance as discussed below.

^(b) Fiscal 2018 federal deferred expense is primarily driven by the remeasurement of our deferred tax asset at the newly enacted 21.0% federal tax rate, partially offset by the release of the remaining valuation allowance on our federal deferred tax assets.

^(c)Fiscal 2018 state deferred benefit is primarily driven by the release of valuation allowance in certain operating jurisdictions; refer to discussion below titled “Valuation Allowance.”

Schedule of effective income tax rate reconciliation

The (benefit) expense from income taxes from continuing operations differs from the amount computed by applying the federal income tax statutory rate as follows for the periods presented:



	Fiscal Year Ended September 30,
in thousands	2019			2018			2017
Income tax computed at statutory rate	$	(24,494	)	$	12,112		$	12,052
State income taxes, net of federal benefit	(590		)	111			1,287
Deferred rate change	(88		)	110,071			—
Decrease in valuation allowance - other ^{(a) (b)}	—			(27,370		)	(3,482		)
Changes in uncertain tax positions	(7		)	598			(685		)
Stock based compensation	—			—			741
Permanent differences	2,908			2,133			496
Tax credits	(14,902		)	(3,174		)	(7,460		)
Other, net	(44		)	3			(253		)
Total (benefit) / expense	$	(37,217	)	$	94,484		$	2,696

^(a)For fiscal 2018, amount includes a $27.4 million release of the valuation allowance on our federal and state deferred tax assets; refer to discussion below titled “Valuation Allowance.” Due to our fiscal year end, our fiscal provision was calculated using a blended 24.5% federal tax rate. The increase in permanent differences in fiscal 2018 compared to the prior fiscal year was largely driven by the limits on deductibility for executive compensation for current year incentive awards and anticipated limitations on unvested stock awards due to the enactment of the Tax Cuts and Jobs Act.

^(b)For fiscal 2017, amount includes $3.5 million release of the valuation allowance on our state deferred tax assets due to a number of changes to the legal forms of our operating entities; refer to discussion below titled “Valuation Allowance.”

Schedule of deferred tax assets and liabilities

The tax effects of significant temporary differences that give rise to the net deferred tax assets are as follows as of September 30, 2019 and September 30, 2018:



in thousands	September 30, 2019			September 30, 2018
Deferred tax assets:
Federal and state tax carryforwards	$	208,360		$	196,702
Inventory adjustments	42,605			29,565
Intangible assets	17,209			192
Incentive compensation	9,360			11,959
Warranty and other reserves	4,302			6,350
Property, equipment and other assets	2,255			2,123
Uncertain tax positions	729			734
Other	623			542
Total deferred tax assets	285,443			248,167
Valuation allowance	(38,486		)	(34,212		)
Net deferred tax assets	$	246,957		$	213,955

Schedule of unrecognized tax benefits roll forward

A reconciliation of our unrecognized tax benefits is as follows for the beginning and end of each period presented:



	Fiscal Year Ended September 30,
in thousands	2019			2018			2017
Balance at beginning of year	$	3,494		$	3,804		$	4,541
Additions for tax positions related to current year	—			—			61
Additions for tax positions related to prior years	—			—			2,611
Reductions in tax positions of prior years	—			—			(2,273		)
Lapse of statute of limitations	(21		)	(310		)	(1,136		)
Balance at end of year	$	3,473		$	3,494		$	3,804