Income Taxes (Text Block)

12 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

INCOME TAXES

The provision for income taxes from continuing operations consists of the following:

	Year ended June 30,
	2012		2011		2010
Current:
Federal	$	48,053	$	43,334	$	39,994
State	6,022		6,180		6,238
Deferred:
Federal	20,649		18,276		14,327
State	1,960		2,251		2,367
	$	76,684	$	70,041	$	62,926

The tax effects of temporary differences related to deferred taxes shown on the balance sheets were:

	June 30,
	2012			2011
Deferred tax assets:
Deferred revenue	$	8,575		$	5,372
Expense reserves (bad debts, insurance, franchise tax and vacation)	9,349			8,086
Net operating loss carryforwards	9,454			11,097
Other, net	1,410			1,122
	28,788			25,677
Deferred tax liabilities:
Accelerated tax depreciation	(34,636		)	(29,971		)
Accelerated tax amortization	(91,379		)	(81,265		)
Prepaid expenses	(23,331		)	(18,713		)
Other, net	(6,280		)	—
	(155,626		)	(129,949		)
Net deferred tax liability before valuation allowance	(126,838		)	(104,272		)
Valuation allowance	(350		)	(306		)
Net deferred tax liability	$	(127,188	)	$	(104,578	)

The deferred taxes are classified on the balance sheets as follows:

	2012			2011
Deferred income taxes (current)	$	(26,256	)	$	(15,274	)
Deferred income taxes (long-term)	(100,932		)	(89,304		)
	$	(127,188	)	$	(104,578	)

The following analysis reconciles the statutory federal income tax rate to the effective income tax rates reflected above:

	Year Ended June 30,
	2012		2011		2010
Computed "expected" tax expense	35.0	%	35.0	%	35.0	%
Increase (reduction) in taxes resulting from:
State income taxes, net of federal income tax benefits	2.2	%	2.6	%	2.5	%
Research and development credit	(1.8	)%	(2.0	)%	(0.7	)%
Domestic production activities deduction	(2.1	)%	(2.5	)%	(3.0	)%
Other (net)	(0.2	)%	0.7	%	1.0	%
	33.1	%	33.8	%	34.8	%

An adjustment was made during fiscal 2011 to reflect a $3,802 reduction to the net deferred tax liability assumed upon the acquisition of iPay in fiscal 2010. Further details are provided in Note 12.

As of June 30, 2012, we have $20,006 of net operating loss (“NOL”) carryforwards pertaining to the acquisition of GFSI, which are expected to be utilized after the application of IRC Section 382. Separately, as of June 30, 2012, we had state NOL carryforwards of $3,432. The federal and state losses have varying expiration dates, ranging from 2013 to 2030. Based on state tax rules which restrict our utilization of these losses, we believe it is more likely than not that $350 of these losses will expire unutilized. Accordingly, a valuation allowance of $350 and $306 has been recorded against these assets as of June 30, 2012 and 2011, respectively.

The Company paid income taxes of $44,962, $60,515, and $42,116 in 2012, 2011, and 2010 respectively.

At June 30, 2011, the Company had $8,897 of unrecognized tax benefits. At June 30, 2012, the Company had $6,202 of gross unrecognized tax benefits, $4,754 of which, if recognized, would affect our effective tax rate. We had accrued interest and penalties of $711 and $1,030 related to uncertain tax positions at June 30, 2012 and 2011, respectively.

A reconciliation of the unrecognized tax benefits for the years ended June 30, 2012 and 2011 follows:

	Unrecognized Tax Benefits
Balance at July 1, 2010	$	7,187
Additions for current year tax positions	1,338
Reductions for current year tax positions	—
Additions for prior year tax positions	599
Reductions for prior year tax positions	—
Settlements	—
Reductions related to expirations of statute of limitations	(227		)
Balance at June 30, 2011	8,897
Additions for current year tax positions	1,673
Reductions for current year tax positions	—
Additions for prior year tax positions	8
Reductions for prior year tax positions	(2,904		)
Settlements	(1,454		)
Reductions related to expirations of statute of limitations	(18		)
Balance at June 30, 2012	$	6,202

During the fiscal year ended June 30, 2012, the Internal Revenue Service initiated an examination of the Company’s U.S. federal income tax returns for the fiscal years ended June 30, 2010 and 2011. This audit is expected to be completed late in fiscal 2013 or early fiscal 2014. At this time, it is anticipated that the examination will not result in a material change to the Company’s financial statements. During the fiscal year ended June 30, 2010, the IRS commenced an examination of the Company's income tax returns for the fiscal years ended June 30, 2008 and 2009. The exam was completed in fiscal 2012 and did not result in a material change to the financial condition of the Company. The U.S. federal and state income tax returns for June 30, 2009 and all subsequent years remain subject to examination as of June 30, 2012 under statute of limitations rules. We anticipate potential changes could reduce the unrecognized tax benefits balance by $200 - $2,500 within twelve months of June 30, 2012