Income Taxes

9 Months Ended

May 31, 2023

Income Taxes

Income Taxes

Note 7.    Income Taxes

During the three and nine months ended May 31, 2023, the Company recorded an income tax provision of $1,772,000 and $5,216,000, respectively, resulting in an effective tax rate of 25% and 25.6%, respectively. During the three and nine months ended May 31, 2022, the Company recorded an income tax provision of $1,878,000 and $5,471,000, respectively, resulting in an effective tax rate of 26.1%. The current period effective tax rate differs from the statutory rate of 21% primarily due to the state tax rates and permanent book tax differences.

Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. For the three and nine months ended May 31, 2023, the Company did not have a liability for any unrecognized tax benefit. The Company has elected to classify interest and penalties as a component of its income tax provision. For the three and nine months ended May 31, 2023, the Company did not have a liability for penalties or interest. The Company does not expect any changes to its unrecognized tax benefit for the next three months that would materially impact its consolidated financial statements.

The Company’s tax years for 2019, 2020 and 2021 are subject to examination by the taxing authorities. With few exceptions, the Company is no longer subject to U.S. federal, state, local or foreign examinations by taxing authorities for years before 2018.