
Years ended June 30,	2020		2019		2018

Current:
Federal	$	468.3	$	464.3	$	366.6
Foreign	119.5		129.1		105.5
State	102.3		110.1		77.6
Total current	690.1		703.5		549.7

Deferred:
Federal	23.7		7.9		(193.0)
Foreign	(5.4)		12.8		26.1
State	7.7		(11.4)		14.9
Total deferred	26.0		9.3		(152.0)
Total provision for income taxes	$	716.1	$	712.8	$	397.7


Years ended June 30,	2020		%	2019		%	2018		%

Provision for taxes at U.S. statutory rate	$	668.4	21.0	$	631.2	21.0	$	640.5	28.1

Increase/(decrease) in provision from:

State taxes, net of federal tax benefit	85.6		2.7	80.7		2.7	58.1		2.5
Valuation Allowance Release on Foreign tax credits	(20.3)		(0.6)	—		—	—		—
U.S. tax on foreign income	—		—	—		—	12.0		0.5
Utilization of foreign tax credits	—		—	—		—	(19.6)		(0.9)
Tax settlements	—		—	—		—	(31.9)		(1.4)
Re-measurement of deferred tax balances	—		—	—		—	(253.3)		(11.1)


Resolution of tax matters - Section 199 Qualified production activities and research tax credit refund claim	—		—	—		—	(33.3)		(1.5)
Foreign rate differential	44.9		1.4	46.9		1.6	—		—
Excess tax benefit - Stock-based compensation	(26.9)		(0.8)	(29.8)		(1.0)	(26.7)		(1.2)
Other	(35.6)		(1.2)	(16.2)		(0.6)	51.9		2.4
	$	716.1	22.5	$	712.8	23.7	$	397.7	17.4

The effective tax rate for fiscal 2020 and 2019 was 22.5% and 23.7%, respectively. The decrease in the effective tax rate is primarily due to the release of a valuation allowance related to foreign tax credit carryforwards, a reduction in the operating tax rate due to the mix between domestic and foreign earnings, the benefit of a foreign tax law change and lower reserves for uncertain tax positions during fiscal 2020 partially offset by favorable adjustments to prior year tax liabilities during fiscal 2019.

The effective tax rate for fiscal 2019 and 2018 was 23.7% and 17.4%, respectively. The increase in the effective tax rate is primarily due to the one-time benefit recognized on the re-measurement of deferred tax balances, primarily as a result of ASC 606, using the lower tax rates enacted under the Act, the release of reserves for uncertain tax positions during fiscal 2018 and the loss of the qualified production activities tax deduction as a result of the Act during fiscal 2019. This is partially offset by the reduction in the federal corporate statutory tax rate to 21% from our blended rate for fiscal 2018 of 28.1% as a result of the Act.


Years ended June 30,	2020		2019

Deferred tax assets:
Accrued expenses not currently deductible	$	203.0	$	228.9
Stock-based compensation expense	33.8		45.3
Foreign tax credits	20.1		25.1

Net operating losses	52.0		54.0

Retirement Benefits	46.0		5.6
Other	25.9		20.2
	380.8		379.1
Less: valuation allowances	(12.0)		(31.6)
Deferred tax assets, net	$	368.8	$	347.5

Deferred tax liabilities:

Deferred revenue	$	475.0	$	475.9
Fixed and intangible assets	288.2		279.5
Prepaid expenses	82.3		86.2
Unrealized investment gains, net	187.9		63.0
Tax on unrepatriated earnings	22.2		31.6
Other	6.4		7.2
Deferred tax liabilities	1,062.0		943.4
Net deferred tax liabilities	$	693.2	$	595.9

Income taxes have not been provided on undistributed earnings of certain foreign subsidiaries in an aggregate amount of approximately $274.1 million as the Company considers such earnings to be permanently reinvested outside of the United States. As of June 30, 2020, it is not practicable to estimate the unrecognized tax liability that would occur upon distribution.

The Company has estimated foreign net operating loss carry-forwards of approximately $55.3 million as of June 30, 2020, of which $0.9 million expire through June 2025 and $54.4 million have an indefinite utilization period. As of June 30, 2020, the Company has approximately $58.7 million of federal net operating loss carry-forwards from acquired companies. The net operating losses have an annual utilization limitation pursuant to section 382 of the Internal Revenue Code and expire through June 2036.

The Company has state net operating loss carry-forwards of approximately $374.8 million as of June 30, 2020, which expire through June 2039. The Company has recorded valuation allowances of $12.0 million and $31.6 million at June 30, 2020 and 2019, respectively, to reflect the estimated amount of domestic and foreign deferred tax assets that may not be realized.

As of June 30, 2020, 2019, and 2018 the Company's liabilities for unrecognized tax benefits, which include interest and penalties, were $62.3 million, $54.2 million, and $45.2 million respectively. The amount that, if recognized, would impact the effective tax rate is $49.9 million, $43.3 million, and $36.1 million, respectively. The remainder, if recognized, would principally impact deferred taxes.


	2020		2019		2018

Unrecognized tax benefits at beginning of the year	$	54.2	$	45.2	$	74.6
Additions for tax positions	13.2		9.5		4.0

Additions for tax positions of prior periods	6.3		18.3		19.8
Reductions for tax positions of prior periods	(4.3)		(7.7)		(40.5)
Settlement with tax authorities	(4.0)		(10.3)		(11.7)
Expiration of the statute of limitations	(2.8)		(0.6)		(1.0)
Impact of foreign exchange rate fluctuations	(0.3)		(0.2)		—
Unrecognized tax benefit at end of year	$	62.3	$	54.2	$	45.2

Interest expense and penalties associated with uncertain tax positions have been recorded in the provision for income taxes on the Statements of Consolidated Earnings. During the fiscal years 2020, 2019, and 2018, the Company recorded interest expense of $1.6 million, $1.9 million, and $3.2 million, respectively. During fiscal year 2020, the Company recorded a benefit for penalties of $0.3 million, penalties incurred during fiscal years 2019, and 2018 were not significant.

At June 30, 2020, the Company had accrued interest of $8.8 million recorded on the Consolidated Balance Sheets, of which $1.0 million was recorded within income taxes payable, and the remainder was recorded within other liabilities. At June 30, 2019, the Company had accrued interest of $9.3 million recorded on the Consolidated Balance Sheets, of which $4.3 million was recorded within income taxes payable, and the remainder was recorded within other liabilities. At June 30, 2020, the Company’s accrued penalties recorded on the Consolidated Balance Sheets within other liabilities were not material. At June 30, 2019, the Company had accrued penalties of $0.3 million recorded on the Consolidated Balance Sheets within other liabilities.

The Company is routinely examined by the IRS and tax authorities in foreign countries in which it conducts business, as well as tax authorities in states in which it has significant business operations. The tax years currently under examination vary by jurisdiction. Examinations in progress in which the Company has significant business operations are as follows:


Taxing Jurisdiction						Fiscal Years under Examination
U.S. (IRS)						2019 - 2020



Wisconsin						2015 - 2018
Michigan						2012 - 2014, 2015 - 2018
New York State						2016 - 2018
New York City						2016 - 2017
Florida						2016 - 2018

India						2003 - 2007, 2008 - 2010, 2013 - 2016

The Company regularly considers the likelihood of assessments resulting from examinations in each of the jurisdictions. The resolution of tax matters is not expected to have a material effect on the consolidated financial condition of the Company, although a resolution could have a material impact on the Company's Statements of Consolidated Earnings for a particular future period and on the Company's effective tax rate.