Income Taxes (Tables)

12 Months Ended

Sep. 30, 2024

Components of income tax expense (benefit)

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


	Year Ended September 30,
	2024		2023		2022
	(In millions)
Current tax expense:
Federal	$	1,200.9	$	1,293.0	$	1,448.9
State	258.8		272.4		256.1
	1,459.7		1,565.4		1,705.0
Deferred tax expense (benefit):
Federal	15.5		(39.0)		21.2
State	3.5		(6.9)		7.9
	19.0		(45.9)		29.1
Total income tax expense	$	1,478.7	$	1,519.5	$	1,734.1

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,
	2024		2023		2022
	(In millions)
Income taxes at federal statutory rate	$	1,319.8	$	1,326.1	$	1,602.2
Increase (decrease) in tax resulting from:
State income taxes, net of federal benefit	205.8		208.1		210.0
Valuation allowance	0.1		(3.1)		(2.1)
Tax credits	(70.4)		(44.4)		(100.8)
Excess tax benefit from stock-based compensation	(42.7)		(25.6)		(20.1)
Tax contingencies	(1.4)		(1.5)		—
Other	67.5		59.9		44.9
Total income tax expense	$	1,478.7	$	1,519.5	$	1,734.1

Components of deferred tax assets and liabilities

Components of deferred income taxes are summarized as follows:


	September 30,
	2024		2023
	(In millions)
Deferred tax assets:
Inventory costs	$	87.3	$	67.8
Inventory impairments	8.7		5.8
Warranty and construction defect costs	316.2		281.2
Net operating loss carryforwards	38.9		42.2
Tax credit carryforwards	6.9		6.8
Incentive compensation plans	93.7		88.0
Other	14.0		7.0
Total deferred tax assets	565.7		498.8
Valuation allowance	(14.9)		(14.8)
Total deferred tax assets, net of valuation allowance	550.8		484.0
Deferred tax liabilities:
Deferral of profit on home closings	226.4		163.6
Depreciation of fixed assets	44.8		46.3
Deferral of income	29.3		23.4
Undistributed earnings of subsidiary	77.4		51.7
Other	5.4		11.8
Total deferred tax liabilities	383.3		296.8
Deferred income taxes, net	$	167.5	$	187.2

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amounts of unrecognized tax benefits for fiscal 2024 and 2023 is as follows:


	Year Ended September 30,
	2024		2023
	(In millions)
Unrecognized tax benefits, beginning of year	$	1.4	$	2.9
Decreases for tax positions taken in the current or prior years	(1.4)		—
Settlements	—		(1.5)
Unrecognized tax benefits, end of year	$	—	$	1.4