XML 30 R20.htm IDEA: XBRL DOCUMENT v3.4.0.3
Income Taxes
9 Months Ended
Apr. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The effective tax rate for the three and nine months ended April 30, 2016 was 24.0 percent and 24.9 percent, respectively, compared to 29.5 percent and 27.9 percent for the three and nine months ended April 30, 2015. The decrease in the Company’s effective tax rate for the three and nine months ended April 30, 2016 was primarily due to a $3.0 million tax benefit recorded in the third quarter of the current year associated with the favorable settlement of tax audits, and a reduction in the Company's tax rate prior to discrete items, which was driven by a favorable shift in mix of earnings between tax jurisdictions.
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 April 30, 2016, the total unrecognized tax benefits were $16.8 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 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.