Income Taxes

12 Months Ended

May 31, 2022

Income Taxes

Income Taxes

6. Income Taxes

The provision for income tax on income from continuing operations includes the following components:

	For the Year Ended
	May 31,
	2022		2021		2020
Current:
Federal	$	11.0	$	5.2	$	1.4
State		2.6		1.2		0.9
Foreign		4.3		3.4		2.8
		17.9		9.8		5.1
Deferred		8.7		8.4		0.5
	$	26.6	$	18.2	$	5.6

The provision for income taxes on pre-tax income differs from the amount computed by applying the U.S. federal statutory income tax rate of 21.0% for fiscal 2022, 2021 and 2020 to income from continuing operations before provision for income taxes due to the following:

	For the Year Ended
	May 31,
	2022		2021		2020
Provision for income tax at the federal statutory rate	$	22.1	$	13.5	$	6.4
Tax expense (benefits) from stock-based compensation		(2.1)		0.7		(2.1)
State income taxes, net of federal benefit		5.2		2.4		1.1
Change in valuation allowance for state deferred tax assets		—		—		(0.1)
Other		1.4		1.6		0.3
Provision for income tax	$	26.6	$	18.2	$	5.6

Income before provision for income taxes includes the following components:

	For the Year Ended
	May 31,
	2022		2021		2020
Domestic	$	77.1	$	43.7	$	23.6
Foreign		28.0		20.8		6.8
	$	105.1	$	64.5	$	30.4

Our foreign earnings are comprised primarily of the results of our operations in Canada and the United Kingdom.

Deferred tax assets and liabilities result primarily from the differences in the timing of the recognition of transactions for financial reporting and income tax purposes.  Our deferred tax assets and liabilities consist of the following components:

	May 31,
	2022		2021
Deferred tax assets:
Operating lease liabilities	$	21.0	$	20.7
State net operating losses		8.0		6.8
Employee and retirement benefits		7.6		10.4
Allowance for credit losses		—		4.0
Other		1.9		2.6
Total deferred tax assets		38.5		44.5
Deferred tax liabilities:
Tangible and intangible assets		(33.6)		(31.9)
ROU operating lease assets		(22.1)		(21.9)
Other		(2.8)		(0.2)
Total deferred tax liabilities		(58.5)		(54.0)
Net deferred tax liabilities	$	(20.0)	$	(9.5)

As of May 31, 2022, we have determined that the realization of our deferred tax assets is more likely than not and that a valuation allowance is not required. Our net operating losses have carry forward periods that range from 5 to 20 years.  Our history of operating earnings, our expectations for continued future earnings, the nature of certain of our deferred tax assets and the scheduled reversal of deferred tax liabilities, primarily related to depreciation, support the recoverability of the majority of the deferred tax assets. Our net deferred tax assets are included in Other non-current assets on our Consolidated Balance Sheets.

Income tax receivable was $2.7 million at May 31, 2022 and was included in Prepaid expenses and other current assets on the Consolidated Balance Sheet.  Income tax payable was $0.7 million at May 31, 2021 and was included in Accrued liabilities on the Consolidated Balance Sheet.

Our federal income tax returns for fiscal years 2019 and subsequent are open for examination. Various states and foreign jurisdictions also remain open subject to their applicable statute of limitations.