Income Taxes

9 Months Ended

Nov. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

The provision for income taxes reflects an effective tax rate of 26.5% for the three months ended November 30, 2024, compared to 24.6% for the three months ended November 30, 2023. The increase in the effective tax rate is primarily attributable to higher non-deductible items such as compensation limited by IRC Sec. 162(m) and higher state income tax expense, net of federal benefit. The increase is also attributable to lower R&D tax credits related to our 40% investment in the AVAIL JV.

The provision for income taxes reflects an effective tax rate of 24.8% for the nine months ended November 30, 2024 compared to 22.6% for the prior year comparable period. The increase in the effective tax rate is primarily attributable to favorable adjustments for the prior year nine-month period related to uncertain tax positions, partially offset by higher discrete items driven by tax deductions for stock compensation in fiscal year 2025. The increase is also attributable to the increase in state tax expense, net of federal benefit.