Income Taxes

9 Months Ended

Jan. 31, 2024

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 on ordinary income for the full fiscal year is expected to be 20.1%, which is lower than the U.S. federal statutory rate of 21.0%, due to the beneficial impact of the foreign-derived intangible income deduction and tax rate differences on the sale of the Finlandia vodka business, partially offset by the impact of state taxes and the tax effects of foreign operations.

The effective tax rate of 20.3% for the nine months ended January 31, 2024, was higher than the expected tax rate of 20.1% on ordinary income for the full fiscal year ending April 30, 2024, primarily due to the impact of tax rate changes which was partially offset by favorable resolution of uncertain tax positions in the current period. The effective tax rate of 20.3% for the nine months ended January 31, 2024, was lower than the effective tax rate of 23.0% for the same period last year, primarily due to decreased impact of state taxes, the reversal of contingent tax liabilities in the current period, and the beneficial impact of tax rate differences on the sale of the Finlandia vodka business, which was partially offset by the absence of benefit from the reversal of valuation allowances in the current period