Income Taxes

12 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

The components of income tax expense (benefit) are as follows:

	Fiscal Year Ended
	September 30, 2024			September 30, 2023			September 30, 2022
Current:
Federal	$	23.1		$	22.7		$	7.5
State		5.3			3.4			4.7
Deferred:
Federal		(0.8	)		(22.4	)		(3.7	)
State		1.3			(4.2	)		(2.9	)
Valuation allowance		1.2			5.1			—
Total income tax (benefit) expense	$	30.1		$	4.6		$	5.6

Income tax expense (benefit) differs from the amount computed at the federal statutory corporate tax rate as follows:

	Fiscal Year Ended
	September 30, 2024			September 30, 2023			September 30, 2022
Federal tax at statutory rate	$	20.3		$	(0.7	)	$	4.1
State tax, net of federal tax (benefit) expense		4.8			(0.8	)		1.2
Tax effect of:
Equity-based compensation		0.9			0.9			0.6
Non-deductible officers’ compensation		1.3			1.1			0.7
Provision to return and deferred tax adjustments		0.3			(0.8	)		(0.3	)
Non-deductible promotional and entertainment expense		0.9			0.6			0.4
Fuel tax credit and other credits		(0.6	)		(0.7	)		(0.8	)
Carryback claim, net of adjustments		—			(0.8	)		(0.3	)
Divestiture - Non-deductible goodwill		1.2			—			—
Rate changes		0.2			0.5			—
Valuation allowance		1.2			5.1			—
Other, net		(0.4	)		0.2			—
Income tax expense	$	30.1		$	4.6		$	5.6

The components of the Company’s net deferred tax asset and liability accounts resulting from temporary differences between the tax and financial reporting basis of assets and liabilities are as follows:

	September 30, 2024			September 30, 2023
Deferred tax assets:
Self-insurance reserves	$	37.3		$	31.8
Deferred compensation		2.2			2.8
Payroll related accruals		25.3			22.8
Allowance for doubtful accounts		2.5			1.3
Lease liabilities		22.3			23.6
Net operating loss carryforward		4.9			7.1
Business interest expense		17.2			10.4
Other non-current deferred tax assets		1.2			4.5
Total non-current deferred tax assets		112.9			104.3
Valuation allowance		(6.3	)		(5.1	)
Total deferred tax assets	$	106.6		$	99.2
Deferred tax liabilities:
Intangible assets	$	47.1		$	46.2
Property and equipment		63.2			57.3
Deferred revenue		16.6			15.0
Prepaid assets		0.1			0.2
Lease assets		20.7			22.0
Other non-current deferred tax liabilities		1.5			6.0
Total non-current deferred tax liabilities		149.2			146.7
Total net deferred tax liabilities	$	42.6		$	47.5
Classification on balance sheets:
Other assets	$	1.3		$	3.6
Deferred tax liabilities		43.9			51.1

The CARES Act

In March 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law and included various provisions to provide additional economic relief to address the impact of the COVID-19 pandemic. Notable provisions included net operating loss carrybacks, adjustments to the interest expense limitations under the U.S Tax Code Section 163(j), increase in the charitable contributions limitation, payroll tax deferrals of the employer portion of social security tax, a portion of which was repaid during the year ended September 30, 2022 and the remainder of which was repaid in fiscal year 2023, and an employee retention credit for wages paid to an idle employee under certain circumstances resulting from the COVID-19 pandemic. The Company recorded a tax receivable of $39.0 and a benefit of $10.1 to the tax provision for the tax net operating losses incurred in 2021 from the enactment of the CARES Act, net of adjustments. The tax net operating losses have been carried back to prior years. The Company has received all but $8.4 of the benefit from the carryback claims as of September 30, 2024. Further, the Company previously elected to defer the employer portion of social security taxes through 2020 and has filed for the employee retention credit allowed for under the CARES Act. The Company recorded a tax credit of $3.3 related to the employee retention credit during the year ended September 30, 2022 and has received all but $1.0 as of September 30, 2024.

Net Operating Losses and Interest Expense Carryforwards

The Company has state income tax net operating losses ("NOLs") of $90.9M having varying expirations from fiscal year 2025 through an indefinite useful life. The Company has a federal interest expense carryforward of $58.4M and state interest expense carryforwards of $94.6M that can be carried forward indefinitely. The Company believes it is more likely than not it will be unable to utilize some of its separate state NOLs and separate state interest expense carryforwards to offset future income. The increase to the valuation allowance was $1.2 million in FY2024.

At September 30, 2024, $6.3 million of the valuation allowances presented above relate to separate state NOLs and interest expense carryforwards that are not expected to be realized. We evaluate the realization of deferred tax assets by considering such factors as the reversal of existing taxable temporary differences, expected profitability by tax jurisdiction and available carryforward periods. The extent and timing of any such reversals will influence the extent of tax benefits recognized in a particular year. Should applicable losses, credits, and deductions ultimately be realized, the resulting reduction in the valuation allowance would generally be recognized as an income tax benefit.

Uncertain Income Tax Positions

As of September 30, 2024 and 2023, the Company had no unrecognized tax benefits that, if recognized, would impact the Company's effective tax rate. The total amount of unrecognized tax benefits could change within the next twelve months for a number of reasons including audit settlements, tax examination activities and the recognition and measurement considerations under this guidance.

The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions, as well as Canada. The Company’s returns are no longer subject to U.S. federal and state tax examination for fiscal years before 2020 and 2019, respectively.