Income Taxes

9 Months Ended

Jul. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Our quarterly tax provision is calculated using an estimated annual tax rate that is adjusted for discrete items occurring during the period to arrive at our effective tax rate. During the three and nine months ended July 31, 2021, we had effective tax rates of 9.7% and 28.9%, respectively, resulting in a tax benefit of $1.5 million and a tax provision of $37.4 million, respectively. During the three and nine months ended July 31, 2020, we had effective tax rates of 29.9% and (444.6)%, respectively, resulting in provisions for taxes of $24.0 million and $43.2 million, respectively. The effective tax rate for the nine months ended July 31, 2020, excluding an impairment loss of non-deductible goodwill of $163.8 million, was 28.0%. The difference between the effective tax rate and statutory rate is primarily related to tax credits. The rate difference between periods is driven by decreased income in 2021.

Our effective tax rate for the three months ended July 31, 2021, was impacted by a $2.9 million provision from change of tax reserves. Our effective tax rate for the three months ended July 31, 2020, was impacted by a discrete benefit of $0.8 million related to energy efficiency.

Our effective tax rate for the nine months ended July 31, 2021, was impacted by a $3.1 million provision from change of tax reserves and a $1.1 million benefit from energy efficiency incentives. Our effective tax rate for the nine months ended July 31, 2020, was impacted by an impairment loss of non-deductible goodwill as described in Note 5, a $1.9 million tax provision related to the Work Opportunity Tax Credit (“WOTC”), and a $1.2 million benefit related to energy efficiency.

In response to COVID-19, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) on March 27, 2020. The CARES Act provides various tax provisions, including payroll tax provisions, which we have evaluated for applicability. Through December 31, 2020, we deferred approximately $132 million of payroll tax, which the CARES Act requires to be remitted in equal parts by December 31, 2021, and December 31, 2022. The CARES Act did not have a material impact on our income tax provision.

We plan to reinvest our foreign earnings to fund future non-U.S. growth and expansion, and we do not anticipate remitting such earnings to the United States. While U.S. federal tax expense has been recognized as a result of the Tax Cuts and Jobs Act of 2017, no deferred tax liabilities with respect to federal and state income taxes or foreign withholding taxes have been recognized.