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Income Taxes
6 Months Ended
Jan. 31, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The effective tax rate for the three and six months ended January 31, 2016, was 23.0 percent and 25.6 percent, respectively, compared to 26.7 percent and 27.2 percent for the three and six months ended January 31, 2015. The decrease in the Company’s effective tax rate for the three months ended January 31, 2016, was primarily due to a reduction in the Company's base tax rate, which was driven by a favorable shift in mix of earnings between tax jurisdictions, the retroactive aspects of the Protecting Americans From Tax Hikes Act of 2015, a non- recurring tax benefit associated with foreign dividend distributions, and an increase in the ratio of total discrete item benefits to pretax book income versus the prior year. The decrease in the Company's effective tax rate for the six months ended January 31, 2016, was primarily due to a favorable shift in the mix of earnings between tax jurisdictions and an increase in the ratio of total discrete item benefits to pretax book income versus the prior year.
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 2012.
At January 31, 2016, the total unrecognized tax benefits were $19.5 million and accrued interest and penalties on these unrecognized tax benefits were $2.1 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 recorded, substantially all of the unrecognized tax benefits would benefit the effective tax rate. With an average statute of limitations of about 5 years, up to $1.1 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.