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Income Taxes
6 Months Ended
Jan. 31, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The effective tax rate for the three and six months ended January 31, 2017 was 29.8% and 28.4%, respectively, compared to 23.0% and 25.6% for the three and six months ended January 31, 2016, respectively. The increase in the Company’s effective tax rate for the three and six months ended January 31, 2017 was primarily due to benefits recorded in the prior year from the retroactive aspects of the Protecting Americans from Tax Hikes Act of 2015, an unfavorable shift in mix of earnings between tax jurisdictions, and other discrete items.
The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to state and foreign income tax examinations by tax authorities for years before 2008. The United States Internal Revenue Service has completed examinations of the Company’s U.S. federal income tax returns through 2013.
As of January 31, 2017, the total unrecognized tax benefits were $17.8 million and accrued interest and penalties on these unrecognized tax benefits were $2.0 million. The Company recognizes accrued interest related to unrecognized tax benefits in income tax expense. If the Company were to prevail on all unrecognized tax benefits, substantially all of the unrecognized tax benefits would benefit the effective tax rate. With an average statute of limitations of about five years, up to $1.3 million of the unrecognized tax benefits could potentially expire in the next 12 month period unless extended by an audit. It is possible that quicker than expected settlement of either current audits, future audits or disputes would cause additional reversals of previously recorded reserves in the next 12 month period. Quantification of an estimated range and timing of future audit settlements cannot be made at this time.