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Income Taxes
 12 Months Ended
May 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before income taxes consists of the following components for the fiscal years ended May 31:
(In thousands)202420232022
U.S. operations$1,860,859 $1,632,391 $1,445,719 
Foreign operations112,776 60,757 53,049 
$1,973,635 $1,693,148 $1,498,768 
Income tax expense consists of the following components for the fiscal years ended May 31:
(In thousands)202420232022
Current:  
Federal$327,616 $248,413 $162,269 
State and local79,583 56,589 32,431 
Foreign25,344 13,205 16,676 
432,543 318,207 211,376 
Deferred(30,500)26,931 51,635 
$402,043 $345,138 $263,011 

Reconciliation of income tax expense using the statutory rate and actual income tax expense is as follows for the fiscal years ended May 31:
(In thousands)202420232022
Income taxes at the U.S. federal statutory rate$414,463 $355,561 $314,741 
Permanent differences (1)
(67,310)(59,502)(85,413)
State and local income taxes, net of federal benefit49,560 46,245 33,547 
Other5,330 2,834 136 
$402,043 $345,138 $263,011 
(1)    Primarily consists of the excess tax benefits related to stock-based compensation.

The components of deferred income taxes included on the consolidated balance sheets are as follows at May 31:
(In thousands)20242023
Deferred tax assets:  
Reserves related to accounts receivable$13,478 $12,562 
Inventory reserves18,913 22,822 
Insurance reserves45,154 45,153 
Stock-based compensation71,146 63,186 
Net operating loss and foreign related carry-forwards2,169 — 
Operating lease liabilities48,964 46,258 
Deferred compensation and other114,786 92,538 
314,610 282,519 
Valuation allowance(2,129)— 
312,481 282,519 
Deferred tax liabilities:  
Uniform and other rental items in service251,394 248,883 
Property and equipment175,214 171,971 
Intangibles and other amortizable assets178,583 190,299 
Treasury locks37,202 32,830 
Capitalized contract costs91,551 88,056 
Operating lease right-of-use assets48,964 46,258 
State taxes and other5,085 2,578 
787,993 780,875 
Net deferred tax liability$475,512 $498,356 
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 will be realized.

Income taxes paid were $423.1 million, $291.9 million and $208.5 million for the fiscal years ended May 31, 2024, 2023 and 2022, respectively.

As of May 31, 2024 and 2023, there was $32.7 million and $29.3 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, 2024 and 2023, was $2.8 million and $3.2 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, 2022$37,574 
Additions for tax positions of the current year6,904 
Additions for tax positions of prior years6,821 
Settlements(12,937)
Statute expirations(1,608)
Balance at May 31, 202336,754 
Additions for tax positions of the current year10,895 
Additions for tax positions of prior years4,864 
Settlements(7,325)
Statute expirations(3,442)
Balance at May 31, 2024$41,746 

The majority of Cintas' operations are in North America. Cintas is required to file U.S. 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 expense, 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 2020. 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 2018. Based on the status and 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, 2025.

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 Cuts and Jobs 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 to the consolidated financial statements.