INCOME TAXES

9 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

In determining its quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter. The effective tax rate on losses was (18.6)% and the effective tax rate on earnings was 41.9% for the three and nine months ended March 31, 2024, respectively, and the effective tax rate on losses was 14.7% and the effective tax rate on earnings was 1813.5% for the three and nine months ended March 31, 2023, respectively. The lower tax rate on losses in the current three month period was primarily driven by the divestiture of the Argentina business and an international legal entity reorganization, partially offset by the non-deductibility of impaired VMS goodwill in the prior period. The substantially higher tax rate on earnings before income taxes in the prior nine month period was driven by lower pre-tax income due to VMS impairment charges and the non-deductibility of a portion of those charges, partially offset by the divestiture of the Argentina business in the current period.

Income taxes paid, net of refunds, were $314 and $61 for the nine months ended March 31, 2024 and March 31, 2023, respectively. The increase in payments in the current period was primarily driven by income tax payments for fiscal years 2023 and 2024 that were previously deferred as a result of tax relief provided by the IRS due to winter storms in California.