Income Taxes

6 Months Ended

Nov. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 9 — INCOME TAXES

The effective income tax rate of 23.3% for the three months ended November 30, 2021 compares to the effective income tax rate of 23.4% for the three months ended November 30, 2020. The effective income tax rate of 24.6% for the six months ended November 30, 2021 compares to the effective income tax rate of 24.4% for the six months ended November 30, 2020. The effective income tax rates for the three- and six-month periods ended November 30, 2021 and 2020 reflect variances from the 21% statutory rate due primarily to the unfavorable impact of state and local income taxes, non-deductible business expenses and the net tax on foreign subsidiary income resulting from the global intangible low-taxed income provisions, partially offset by tax benefits related to equity compensation.

Our deferred tax liability for unremitted foreign earnings was $13.7 million as of November 30, 2021, which represents our estimate of the foreign tax cost associated with the remittance of $437.6 million of foreign earnings that are not considered to be permanently reinvested. We have not provided for foreign withholding or income taxes on the remaining foreign subsidiaries’ undistributed earnings because such earnings have been retained and reinvested by the subsidiaries as of November 30, 2021. Accordingly, no provision has been made for foreign withholding or income taxes, which may become payable if the remaining undistributed earnings of foreign subsidiaries were remitted to us as dividends.