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Income Taxes
 12 Months Ended
Jul. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before taxes consisted of the following:
Year Ended July 31,
(In thousands)202520242023
U.S.$1,686,794 $1,593,381 $1,437,126 
International208,787 121,220 117,202 
Total income before taxes$1,895,581 $1,714,601 $1,554,328 

Income tax expense (benefit) from continuing operations consisted of the following:
Year Ended July 31,
(In thousands)202520242023
Federal:   
Current$272,836 $271,820 $243,253 
Deferred(12,654)(1,174)(4,642)
 260,182 270,646 238,611 
State:   
Current37,487 49,539 47,507 
Deferred(2,576)(1,611)813 
 34,911 47,928 48,320 
International:   
Current51,113 34,179 26,150 
Deferred1,012 (499)3,506 
 52,125 33,680 29,656 
Income tax expense$347,218 $352,254 $316,587 

A reconciliation of the expected U.S. statutory tax rate to the actual effective income tax rate is as follows:
Year Ended July 31,
(In thousands)202520242023
Federal statutory rate21.0 %21.0 %21.0 %
State income taxes, net of federal income tax benefit2.1 %2.4 %2.0 %
International rate differential0.3 %0.1 %(0.3)%
Compensation and fringe benefits(1.6)%(0.7)%(1.0)%
FDII and/or GILTI(2.8)%(2.8)%(2.8)%
Federal return to provision adjustment(0.1)%— %(0.1)%
Other differences(0.6)%0.5 %1.6 %
Effective tax rate18.3 %20.5 %20.4 %
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) are presented below:
July 31,
(In thousands)20252024
Deferred tax assets:  
Allowance for credit loss$2,794 $2,483 
Accrued compensation and benefits24,868 22,957 
Operating lease liabilities21,213 24,897 
Accrued other3,233 5,528 
Deferred revenue5,989 5,544 
Losses carried forward/interest disallowance52,256 48,599 
Federal tax benefit7,974 12,821 
Total gross deferred tax assets118,327 122,829 
Less: Valuation allowance(50,311)(47,377)
Net deferred tax assets68,016 75,452 
Deferred tax liabilities:  
Vehicle pooling costs(25,018)(27,716)
Property and equipment(58,782)(74,741)
Operating lease right-of-use assets(21,655)(24,612)
Other prepaids(2,420)(2,339)
Intangibles and goodwill(38,586)(38,279)
Total gross deferred tax liabilities(146,461)(167,687)
Net deferred tax liabilities$(78,445)$(92,235)

On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025 (the “OBBBA”) which includes, among other provisions, changes to the U.S. corporate income tax system including extensions and modifications of the Tax Cuts and Jobs Act of 2017. The OBBBA did not have a material impact on the Company results of operations and financial position as of and for the fiscal year ended July 31, 2025.

The Company’s effective income tax rates were 18.3%, 20.5%, and 20.4% for fiscal 2025, 2024 and 2023, respectively. The Company’s U.S. federal statutory tax rate for fiscal years 2025, 2024, and 2023 was 21.0%. The effective tax rate for the fiscal year ended July 31, 2025 was favorably impacted by a $55.0 million tax benefit related to the FDII deduction and $36.7 million in excess tax benefits from the exercise of employee stock options and negatively impacted by $38.6 million related to state income taxes. The effective tax rate for the fiscal year ended July 31, 2024 was favorably impacted by a $47.7 million tax benefit related to the FDII deduction and $14.8 million in excess tax benefits from the exercise of employee stock options and negatively impacted by $40.6 million related to state income taxes. The effective tax rate for the fiscal year ended July 31, 2023 was favorably impacted by a tax benefit of $42.6 million related to the FDII deduction and $21.0 million tax benefits from the exercise of employee stock options and negatively impacted by $30.3 million related to state income taxes.

The Company’s ability to realize deferred tax assets is dependent on its ability to generate future taxable income. Accordingly, the Company has established a valuation allowance in taxable jurisdictions where the utilization of the tax assets does not meet the more-likely-than-not threshold of recognition. Additional timing differences or future tax losses may occur which could warrant a need for establishing additional valuation allowances against certain deferred tax assets. During fiscal year 2025, the Company recorded a $2.9 million increase in valuation allowances primarily due to additional operating losses and interest disallowance carryforward generated in foreign jurisdictions unlikely to be realized.

As of July 31, 2025 and 2024, the Company had foreign operating losses and interest disallowance carryforward of $52.3 million and $48.6 million (tax effected), respectively. The foreign operating losses, subject to certain limitations, usually can be carried forward indefinitely. However, these losses are subject to valuation allowance based on realizability. The valuation allowance for the fiscal year ended July 31, 2025 and 2024 was $50.3 million and $47.4 million, respectively, which are primarily related to operating losses in certain foreign jurisdictions.
The following table summarizes the activities related to the Company’s unrecognized tax benefits resulting from uncertain tax positions.
July 31,
(In thousands)202520242023
Beginning balance$45,725 $57,445 $55,754 
Increases related to current year tax positions— 2,955 10,006 
Prior year tax positions:   
Increases recognized during the period126 11 1,388 
Decreases recognized during the period(9,724)(7,070)(7,623)
Cash settlements during the period(8,951)(6,062)(403)
Lapse of statute of limitations(1,950)(1,554)(1,677)
Ending balance$25,226 $45,725 $57,445 

As of July 31, 2025 and 2024, if recognized, the portion of liabilities for unrecognized tax benefits resulting from uncertain tax positions that would favorably affect the Company’s effective tax rate was $19.9 million and $36.1 million, respectively. It is possible that the amount of unrecognized tax benefits will change in the next twelve months, due to tax legislation updates or future audit outcomes; however, an estimate of the range of the possible change cannot be made at this time.

The Company recognizes interest and penalties related to income tax matters in income tax expense. As of July 31, 2025, 2024 and 2023, the Company had accrued interest and penalties related to unrecognized tax benefits of $10.4 million, $13.8 million and $11.7 million, respectively.

The Company files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. The Company is currently under examination by certain taxing authorities in the U.S. for fiscal years between 2020 and 2022. At this time, the Company does not believe that the outcome of any examination will have a material impact on the Company’s consolidated results of operations and financial position.

As of July 31, 2025, the Company has undistributed earnings of approximately $688.5 million generated by its foreign subsidiaries. As the Company determined these undistributed foreign earnings along with any additional outside basis differences were indefinitely reinvested as of July 31, 2025, no deferred tax was therefore provided. The Company believes it is not practicable to estimate the amount of deferred tax liability related to the entire outside basis differences due to the complexity of the calculation and the uncertainty regarding assumptions necessary to compute the tax. However, the Company would not anticipate any significant tax liability associated with the repatriation of the undistributed earnings.