Income Taxes

12 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities, and are measured by applying enacted tax rates and laws for the taxable years in which those differences are expected to reverse. Deferred tax assets are evaluated for the estimated future tax effects of deductible temporary differences and tax operating loss carryovers. A valuation allowance is recorded when it is more-likely-than-not that a deferred tax asset will not be realized.

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

	Fiscal Year Ended
	September 30, 2020			September 30, 2019			September 30, 2018
Current:
Federal	$	12.5		$	10.1		$	(5.3	)
State		5.0			5.0			2.4
Deferred:
Federal		(19.6	)		0.8			(54.5	)
State		(7.5	)		(3.1	)		(8.8	)
Total income tax (benefit) expense	$	(9.6	)	$	12.8		$	(66.2	)

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

	Fiscal Year Ended
	September 30, 2020			September 30, 2019			September 30, 2018
Federal tax at statutory rate	$	(10.8	)	$	12.0		$	(20.0	)
State tax, net of federal tax (benefit) expense		(2.5	)		1.5			(5.2	)
Tax effect of:
Equity-based compensation		1.5			1.0			2.4
Provision to return and deferred tax adjustments		(0.7	)		(0.9	)		(0.6	)
Non-deductible promotional and entertainment    expense		0.6			0.8			1.0
Goodwill impairment		3.3			—			—
Fuel tax credit and other credits		(0.8	)		(0.8	)		(0.7	)
Change in uncertain tax positions		(0.1	)		(0.8	)		0.6
Non-deductible IPO costs		—			—			1.6
Domestic production activities deduction(a)		—			—			(1.7	)
Rate change(b)		—			0.1			(43.4	)
Other, net		(0.1	)		(0.1	)		(0.2	)
Income tax (benefit) expense	$	(9.6	)	$	12.8		$	(66.2	)

(a) In 2018, the Company calculated refund claims related to the domestic production activities deduction.  The refund claims reduced the tax provision by $1.7. The domestic production activities deduction was eliminated by the 2017 Tax Act.

(b) In 2018, the inclusion of the revaluation of the net deferred tax liability attributable to the 2017 Tax Act reduced the tax provision by $43.4.

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, 2020		September 30, 2019
Deferred tax assets:
Interest rate swaps	$	3.3	$	4.9
Self-insurance reserves		27.4		23.7
Deferred compensation		2.7		2.8
Deferred rent		—		0.4
Payroll related accruals		15.8		11.2
Other accrued expenses		5.1		2.3
Allowance for doubtful accounts		0.8		1.3
Lease liabilities		16.6		—
Net operating loss carryforward		5.5		5.0
Other non-current deferred tax assets		2.3		0.9
Total non-current deferred tax assets		79.5		52.5
Valuation allowance		—		—
Total deferred tax assets	$	79.5	$	52.5
Deferred tax liabilities:
Intangible assets	$	53.2	$	60.9
Property and equipment		42.3		42.8
Inventories		—		4.7
Deferred revenue		7.1		7.8
Prepaid assets		0.5		0.3
Lease assets		14.8		—
Other non-current deferred tax liabilities		0.5		0.4
Total non-current deferred tax liabilities		118.4		116.9
Total deferred tax liabilities	$	38.9	$	64.4

The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. The Company’s returns are no longer subject to U.S. federal and state tax examination for years before 2017 and 2016, respectively.  The Company’s 2016 U.S. federal tax return examination was closed during this fiscal year. 

Income Tax Reform

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the 2017 Tax Act. The 2017 Tax Act makes broad and complex changes to the U.S. tax code that affected the Company’s fiscal year ending September 30, 2018, including but not limited to, (1) reducing the U.S. federal corporate tax rate and (2) bonus depreciation that will allow for full expensing of qualified property. The 2017 Tax Act reduced the Company’s federal corporate tax rate to 21% in the fiscal year ending September 30, 2018. Section 15 of the Internal Revenue Code stipulates that the Company’s fiscal year ending September 30, 2018 has a blended corporate tax rate of 24.5 %, which is based on the applicable tax rates before and after the 2017 Tax Act and the number of days in the year.

As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the 2017 Tax Act, the Company revalued its ending net deferred tax liabilities at December 31, 2017 and recognized a $43.4 tax benefit in the Company’s Consolidated Statement of Operations for the year ended September 30, 2018.

Net Operating Losses

The Company has state income tax net operating losses of $94.7 which expire in tax years from fiscal year 2020 through fiscal year 2040.  The Company believes it is more likely than not it will be able to utilize all losses to offset future income.