Income Taxes (Tables)

12 Months Ended

Sep. 30, 2019

Components of income tax expense (benefit)

The components of the Company’s income tax expense are as follows:



	Year Ended September 30,
	2019		2018		2017
	(In millions)
Current tax expense:
Federal	$	407.3	$	373.2	$	425.6
State	79.3		53.6		27.3
	486.6		426.8		452.9
Deferred tax expense:
Federal	13.9		158.7		87.9
State	6.2		12.2		22.9
	20.1		170.9		110.8
Total income tax expense	$	506.7	$	597.7	$	563.7

Comparison of income tax expense (benefit) and tax computed at the statutory rate

Differences between income tax expense and tax computed by applying the federal statutory rate of 21% in fiscal 2019, 24.5% in fiscal 2018 and 35% in fiscal 2017 to income before income taxes during each year is due to the following:



	Year Ended September 30,
	2019			2018			2017
	(In millions)
Income taxes at federal statutory rate	$	446.3		$	505.0		$	560.7
Increase (decrease) in tax resulting from:
State income taxes, net of federal benefit	69.1			59.4			42.3
Domestic production activities deduction	—			(36.7		)	(39.8		)
Valuation allowance	(0.2		)	(7.3		)	0.8
Tax credits	(1.6		)	(19.0		)	(3.5		)
Excess tax benefit from stock-based compensation	(16.1		)	(21.2		)	—
Tax law change from enactment of Tax Act	—			108.7			—
Other	9.2			8.8			3.2
Total income tax expense	$	506.7		$	597.7		$	563.7

Components of deferred tax assets and liabilities

Components of deferred income taxes are summarized as follows:



	September 30,
	2019			2018
	(In millions)
Deferred tax assets:
Inventory costs	$	39.8		$	40.9
Inventory impairments	27.9			31.8
Warranty and construction defect costs	135.1			121.8
Net operating loss carryforwards	31.5			38.1
Tax credit carryforwards	3.5			4.3
Incentive compensation plans	65.1			55.2
Deferred income	0.2			1.3
Other	7.0			5.8
Total deferred tax assets	310.1			299.2
Valuation allowance	(18.7		)	(17.7		)
Total deferred tax assets, net of valuation allowance	$	291.4		$	281.5
Deferred tax liabilities:
Deferral of profit on home closings	95.4			64.9
Depreciation of fixed assets	14.2			10.7
Other	18.7			11.9
Total deferred tax liabilities	$	128.3		$	87.5
Deferred income taxes, net	$	163.1		$	194.0