Income Taxes

9 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

    The effective tax rates for the quarters ended June 30, 2022 and June 30, 2021 were 23.3% and 26.0%, respectively. The effective tax rates for the nine months ended June 30, 2022 and June 30, 2021 were 24.9% and 26.5%, respectively. The decrease in the effective tax rate for both the quarter and nine months ended June 30, 2022 was primarily due to the realization of the Enhanced Oil Recovery credit in fiscal 2022 that was not available during fiscal 2021.

    As a result of the sale of the Company's California assets as described in Note 2 – Asset Acquisitions and Divestitures, the remaining deferred tax assets related to the California net operating loss and tax credit carryforwards, which are currently offset with a full valuation allowance, were written off. The deferred tax assets and valuation allowance were written off as the Company determined that there was a remote possibility for use as the Company no longer has California operations. See the table below for the impact to the valuation allowance resulting from the sale (in thousands):

Balance at October 1, 2021	$	57,645
Adjustment Related to Sale of California Assets and Current Year Activity	(28,747)
Balance at June 30, 2022	$	28,898

    Subsequent to the end of the third quarter of fiscal 2022, on July 8, 2022, House Bill 1342 was signed into law in Pennsylvania. The law reduces the corporate income tax rate to 8.99% for fiscal 2024. Starting with fiscal 2025, the rate is reduced by 0.5% annually until it reaches 4.99% for fiscal 2032. Due to the reduced state income tax rate, Pennsylvania deferred income taxes will be remeasured using the new rates. The anticipated income tax benefit resulting from the reduced tax rate of approximately $25 million to $30 million will be recorded during the fourth quarter of fiscal 2022.