Income Taxes (Tables)

12 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Components of income tax expense (benefit)

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

	Year Ended September 30,
	2022		2021		2020
	(In millions)
Current tax expense:
Federal	$	1,448.9	$	978.1	$	484.0
State	256.1		197.0		104.4
	1,705.0		1,175.1		588.4
Deferred tax expense (benefit):
Federal	21.2		(12.7)		20.0
State	7.9		2.7		(5.9)
	29.1		(10.0)		14.1
Total income tax expense	$	1,734.1	$	1,165.1	$	602.5

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% to income before income taxes during each year is due to the following:

	Year Ended September 30,
	2022		2021		2020
	(In millions)
Income taxes at federal statutory rate	$	1,602.2	$	1,124.8	$	626.4
Increase (decrease) in tax resulting from:
State income taxes, net of federal benefit	210.0		166.9		79.1
Valuation allowance	(2.1)		(3.3)		(11.2)
Tax credits	(100.8)		(116.3)		(93.4)
Excess tax benefit from stock-based compensation	(20.1)		(38.4)		(22.3)
Tax contingencies	—		(6.0)		8.9
Other	44.9		37.4		15.0
Total income tax expense	$	1,734.1	$	1,165.1	$	602.5

Components of deferred tax assets and liabilities

Components of deferred income taxes are summarized as follows:

	September 30,
	2022		2021
	(In millions)
Deferred tax assets:
Inventory costs	$	74.0	$	63.5
Inventory impairments	9.5		12.7
Warranty and construction defect costs	239.5		190.5
Net operating loss carryforwards	44.1		11.7
Tax credit carryforwards	6.4		1.6
Incentive compensation plans	84.7		77.5
Other	12.7		15.6
Total deferred tax assets	470.9		373.1
Valuation allowance	(17.9)		(4.2)
Total deferred tax assets, net of valuation allowance	453.0		368.9
Deferred tax liabilities:
Deferral of profit on home closings	209.4		166.7
Depreciation of fixed assets	30.5		14.4
Deferral of income	18.5		2.0
Undistributed earnings of subsidiary	27.3		10.2
Other	26.2		20.3
Total deferred tax liabilities	311.9		213.6
Deferred income taxes, net	$	141.1	$	155.3

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amounts of unrecognized tax benefits for fiscal 2022 and 2021 is as follows:

	Year Ended September 30,
	2022		2021
	(In millions)
Unrecognized tax benefits, beginning of year	$	2.9	$	8.9
Additions attributable to tax positions taken in the current year	—		1.5
Additions attributable to tax positions taken in prior years	—		—
Settlements	—		(7.5)
Unrecognized tax benefits, end of year	$	2.9	$	2.9