XML 25 R15.htm IDEA: XBRL DOCUMENT v3.20.2
Income Taxes
6 Months Ended
Oct. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Our consolidated interim effective tax rate is based on our expected annual operating income, statutory tax rates, and income tax laws in the various jurisdictions where we operate. Significant or unusual items, including adjustments to accruals for tax uncertainties, are recognized in the fiscal quarter in which the related event or a change in judgment occurs. The effective tax rate of 16.4% for the six months ended October 31, 2020, was lower than the expected tax rate of 22.0% on ordinary income for the full fiscal year primarily due to a deferred tax benefit related to an intercompany transfer of assets and excess tax benefits related to stock-based compensation. Our expected tax rate includes current fiscal year additions for existing tax contingency items. The effective tax rate for the three months ended October 31, 2020, was 22.1% compared to 15.0% for the same period last year. The increase in our effective tax rate for the three months ended October 31, 2020, was driven primarily by a decrease in the foreign derived intangible income deduction, and the absence of the prior year true-up benefit.

We have asserted that the undistributed earnings of the majority of our foreign subsidiaries are reinvested indefinitely outside the United States. Therefore, no income taxes have been provided for any outside basis differences inherent in these subsidiaries other than those subject to the one-time repatriation tax. We have a limited number of subsidiaries that are not permanently reinvested and therefore we have recorded the deferred tax liability related to the undistributed earnings (but not for their outside basis differences).