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Income Taxes
 12 Months Ended
May 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before income taxes for continuing operations consists of the following components for the fiscal years ended May 31:
(In thousands)202120202019
U.S. operations$1,221,690 $1,035,902 $1,061,505 
Foreign operations66,059 22,389 40,894 
$1,287,749 $1,058,291 $1,102,399 

Income tax expense (benefit) for continuing operations consists of the following components for the fiscal years ended May 31:
(In thousands)202120202019
Current:   
Federal$164,104 $153,736 $134,174 
State and local42,340 34,502 40,949 
Foreign12,417 6,985 9,882 
218,861 195,223 185,005 
Deferred(42,080)(13,292)34,759 
$176,781 $181,931 $219,764 

Reconciliation of income tax expense (benefit) for continuing operations using the statutory rate and actual income tax expense is as follows for the fiscal years ended May 31:
(In thousands)202120202019
Income taxes at the U.S. federal statutory rate$270,427 $222,258 $231,503 
Permanent differences (1)
(101,870)(67,075)(51,201)
State and local income taxes, net of federal benefit27,304 25,294 31,687 
Capital loss carryback(14,072)— — 
Other (2)
(5,008)1,454 6,506 
Impact of the Tax Cuts and Jobs Act (the Tax Act):
Deemed repatriation of non-U.S. earnings, net of foreign
    tax credits and other (collectively, transition tax)		— — 153 
Non-U.S. withholding taxes related to certain non-U.S.
    earnings subject to repatriation		— — 690 
Remeasurement of U.S. net deferred tax liabilities from
    35% to 21%		— — 426 
$176,781 $181,931 $219,764 
(1)    Primarily consists of the excess tax benefits related to stock-based compensation.

(2)    Primarily consists of adjustments for uncertain tax positions and tax credits.
The components of deferred income taxes included on the consolidated balance sheets are as follows at May 31:
(In thousands)20212020
Deferred tax assets:  
Reserves related to accounts receivable$10,292 $14,718 
Inventory obsolescence30,617 13,744 
Insurance reserves45,802 45,197 
Stock-based compensation74,898 78,802 
Net operating loss and foreign related carry-forwards3,885 7,657 
Treasury locks3,140 39,046 
Operating lease liabilities44,530 42,191 
Deferred compensation and other107,528 73,562 
320,692 314,917 
Valuation allowance(2,037)(6,411)
318,655 308,506 
Deferred tax liabilities:  
Uniform and other rental items in service202,846 189,787 
Property and equipment167,622 177,664 
Service contracts and other intangible assets207,834 207,610 
Capitalized contract costs79,356 77,741 
Operating lease right-of-use assets44,530 42,191 
State taxes and other3,114 2,092 
705,302 697,085 
Net deferred tax liability$386,647 $388,579 

Although realization is not assured, management has evaluated its deferred tax assets to determine whether a valuation allowance is required or should be adjusted. This evaluation considers, among other items, the nature, frequency and amount of recent losses, reversal periods of taxable temporary differences, duration of statutory periods and tax planning strategies. As a result of this analysis, management believes it is more likely than not that the recorded deferred tax assets, net of valuation allowances, will be realized.

The progression of the valuation allowance is as follows at May 31:
(In thousands)20212020
Balance at beginning of year$(6,411)$(7,308)
Subtractions4,374 897 
Balance at end of year$(2,037)$(6,411)

Income taxes paid were $245.5 million, $160.3 million and $173.2 million for the fiscal years ended May 31, 2021, 2020 and 2019, respectively.

As of May 31, 2021 and 2020, there was $34.2 million and $35.9 million, respectively, in total unrecognized tax benefits, which, if recognized, would favorably impact Cintas' effective tax rate. Cintas recognizes interest accrued related to unrecognized tax benefits and penalties in income tax expense in the consolidated statements of income, which is consistent with the recognition of these items in prior reporting periods. The total amount accrued for interest and penalties as of May 31, 2021 and 2020, was $4.2 million and $3.7 million, respectively. Cintas records this tax liability in long-term accrued liabilities on the consolidated balance sheets.
A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits (exclusive of interest and penalties) is as follows:
(In thousands) 
Balance at June 1, 2019$48,715 
Additions for tax positions of the current year3,976 
Additions for tax positions of prior years4,325 
Settlements(5,473)
Statute expirations(6,873)
Balance at May 31, 202044,670 
Additions for tax positions of the current year4,728 
Additions for tax positions of prior years2,726 
Settlements(5,593)
Statute expirations(4,074)
Balance at May 31, 2021$42,457 

The majority of Cintas' operations are in North America. Cintas is required to file federal income tax returns, as well as state income tax returns in a majority of the domestic states and also in certain Canadian provinces. At times, Cintas is subject to audits in these jurisdictions. The audits, by nature, are sometimes complex and can require several years to resolve. The final resolution of any such tax audit could result in either a reduction in Cintas' accruals or an increase in its income tax provision, either of which could have an impact on the consolidated results of operation in any given period.

All U.S. federal income tax returns are closed to audit through fiscal 2017. Cintas is currently in various audits in certain foreign jurisdictions and certain domestic states. The years under foreign and domestic state audits cover fiscal years back to 2014. Based on the resolution of the various audits and other potential regulatory developments, it is expected that the balance of unrecognized tax benefits will not materially change for the fiscal year ending May 31, 2022.

Foreign Withholding Tax
The Company asserts that all foreign earnings will be indefinitely reinvested, with the exception of certain foreign investments in which earnings and cash generation are in excess of local needs. With the passage of the Tax Act in the U.S., dividends of earnings from non-U.S. operations are generally no longer subject to U.S. income tax. Cintas continues to analyze the estimated impact of the non-U.S. income and withholding tax liabilities based on the source of these earnings, as well as the expected means through which those earnings may be taxed; however, the unrecorded tax is not material.