
	Fiscal Year Ended June 30,
	2020		2019		2018
Current:
Federal	$	(44,595)	$	3,639	$	(312)
State and local	619		760		1,383
Foreign	14,021		16,075		17,683
	(29,955)		20,474		18,754
Deferred:
Federal	33,007		(21,538)		(22,612)
State and local	3,414		1,188		1,973
Foreign	(261)		(3,356)		(86)
	36,160		(23,706)		(20,725)
Total	$	6,205	$	(3,232)	$	(1,971)

For the fiscal year ended June 30, 2020, the Company paid cash for income taxes, net of refunds, of $16,162. Cash paid for income taxes, net of (refunds), during the fiscal years ended June 30, 2019 and 2018 amounted to $22,535 and $24,284, respectively.


	Fiscal Year Ended June 30,
	2020		%		2019		%		2018		%
Expected United States federal income tax at statutory rate	$	7,104	21.0	%	$	(11,761)	21.0	%	$	20,354	28.1	%
State income taxes, net of federal (benefit) provision	(668)		(1.9)	%	(8,922)		15.9	%	2,774		3.8	%

Foreign income at different rates	382		1.1	%	763		(1.4)	%	(3,825)		(5.3)	%
Impairment of goodwill and intangibles	—		—	%	—		—	%	1,816		2.5	%
Change in valuation allowance	4,499		13.3	%	8,938		(16.0)	%	119		0.2	%

Change in reserves for uncertain tax positions	7,925		23.4	%	841		(1.5)	%	(3,859)		(5.3)	%
Tax Act’s transition tax (a)	—		—	%	6,834		(12.2)	%	7,054		9.7	%
Tax Act’s impact of deferred taxes (b)	—		—	%	—		—	%	(25,006)		(34.5)	%
U.S. tax (benefit) on foreign earnings	7,449		22.0	%	3,872		(6.9)	%	—		—	%

CARES Act	(25,668)		(75.9)	%	—		—	%	—		—	%
Other	5,182		15.3	%	(3,797)		6.9	%	(1,398)		(1.9)	%
Provision (benefit) for income taxes	$	6,205	18.3	%	$	(3,232)	5.8	%	$	(1,971)	(2.7)	%

(a) For the year ended June 30, 2018, the Company accrued a provisional estimate of $7,054 of tax expense for the Tax Cuts and Jobs Act’s (the “Tax Act”) one-time transition tax on the foreign subsidiaries’ accumulated, unremitted earnings in

accordance with U.S. Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB No.118”). Additionally, during fiscal year 2019, the Company recorded $6,834 of tax expense upon finalizing its analysis of the impact from the Tax Act.

(b) For the year ended June 30, 2018, the Company accrued $25,006 in provisional tax benefit related to the net change in deferred tax liabilities stemming from the Tax Act’s reduction of the U.S. federal tax rate from 35% to 21% and disallowance of certain incentive based compensation tax deductibility under Internal Revenue Code 162(m). There was an immaterial tax benefit recorded for fiscal 2019 related to return to provision adjustments.

With the effective date of January 1, 2018, the Tax Act also introduced a provision to tax global intangible low-taxed income (“GILTI”) of foreign subsidiaries and a measure to tax certain intercompany payments under the base erosion anti-abuse tax “BEAT” regime. For the fiscal years ended June 30, 2020 and 2019, the Company did not generate intercompany transactions that met the BEAT threshold but did generate GILTI tax. The Company elected to account for GILTI tax as a current period cost and recorded an expense of $3,850 during the fiscal year ended June 30, 2020. The GILTI of $3,850 is included in U.S. tax (benefit) on foreign earnings in the effective tax rate which also includes tax expense related to Subpart F Income and unremitted earnings in the total.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Deferred tax assets and liabilities consisted of the following:


	June 30, 2020		June 30, 2019
Noncurrent deferred tax assets (liabilities):
Basis difference on inventory	$	6,724	$	9,128
Reserves not currently deductible	21,173		23,518
Basis difference on intangible assets	(76,746)		(78,638)
Basis difference on property and equipment	(2,627)		(3,195)
Other comprehensive income	1,737		502
Net operating loss and tax credit carryforwards	34,393		73,500
Stock-based compensation	1,417		827
Unremitted earnings of foreign subsidiaries	(1,212)		—
Lease liability	14,096		—
Lease ROU assets	(12,807)		—
Other	4,006		3,995
Valuation allowances	(41,941)		(34,912)
Noncurrent deferred tax liabilities, net⁽¹⁾	$	(51,787)	$	(5,275)

At June 30, 2020 and 2019, the Company had U.S. federal net operating loss (“NOL”) carryforwards of approximately $19,141 and $201,242, respectively, certain of which will not expire until 2036. Certain of these federal loss carryforwards are subject to Internal Revenue Code Section 382 which imposes limitations on utilization following certain changes in ownership of the entity generating the loss carryforward. The Company had foreign NOL carryforwards of approximately $12,587 and $23,761 at June 30, 2020 and 2019, respectively, the majority of which are indefinite lived.

On March 27, 2020, H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into legislation which includes business tax provisions that impacts taxes related to 2018, 2019 and 2020. Some of the significant tax law changes in accordance with the CARES Act are to increase the limitation on deductible business interest expense for 2019 and 2020, allow for the five-year carryback of NOLs for 2018-2020, suspend the 80% limitation of taxable income for net operating loss carryforwards for 2018-2020, provide for the acceleration of depreciation expense from 2018 and forward on qualified improvement property and accelerate the ability to claim refunds of Alternative Minimum Tax (“AMT”) credit carryforwards. The Company carried back net operating losses generated in the June 30, 2019 tax year for five years, resulting in an income tax benefit of $18,949. The $18,949 income tax benefit represents the Federal rate differential between 35% and 21%. In addition, there was an indirect tax benefit of $6,719 related to discontinued operations due to the CARES Act. Accordingly, the gross benefit recorded under the CARES Act in fiscal 2020 is $25,668 prior to the reserve under ASC 740-10.

The benefit of $18,949 and reversal of the deferred tax asset on federal NOLs of $33,551 resulted in a tax refund receivable of $52,500 which is included as a component of Prepaid expenses and other current assets on the Consolidated Balance Sheets.

The Company historically considered the undistributed earnings of its foreign subsidiaries to be indefinitely reinvested and as a result has not provided for taxes on such earnings. To achieve its cash management objectives, during the fourth quarter of fiscal 2020, the Company reversed its reinvestment assertion on $93,359 of foreign earnings and recorded a deferred tax liability of $1,212. The Company continues to reinvest $641,841 of undistributed earnings of its foreign subsidiaries and may be subject to additional foreign withholding taxes and U.S. state income taxes if it reverses its indefinite reinvestment assertion on these foreign earnings in the future. All other outside basis differences not related to earnings were impractical to account for at this period of time and are currently considered as being permanent in duration.

As required by the authoritative guidance on accounting for income taxes, the Company evaluates the realizability of deferred tax assets on a jurisdictional basis at each reporting date. Accounting for income taxes requires that a valuation allowance be established when it is more likely than not that all or a portion of the deferred tax assets will not be realized. In circumstances where there is sufficient negative evidence indicating that the deferred tax assets are not more likely than not realizable, the Company establishes a valuation allowance. The Company has recorded valuation allowances in the amounts of $41,941 and $34,912 at June 30, 2020 and 2019, respectively. During fiscal 2019, the Company recorded a partial valuation allowance against state deferred tax assets and state net operating loss carryforwards as it is not more likely than not that the state tax attributes will be realized. The partial state valuation allowance was retained for fiscal 2020.


	Fiscal Year Ended June 30,
	2020		2019
Balance at beginning of year	$	34,912	$	20,831
Additions charged to income tax expense	7,391		17,773
Reductions credited to income tax expense	35		(3,231)
Currency translation adjustments	(397)		(461)
Balance at end of year	$	41,941	$	34,912


	Fiscal Year Ended June 30,
	2020		2019		2018
Balance at beginning of year	$	11,869	$	6,730	$	11,602
Additions based on tax positions related to the current year	636		248		118
Additions based on tax positions related to prior years	8,499		5,446		—
Reductions due to lapse in statute of limitations and settlements	(105)		(555)		(4,990)
Balance at end of year	$	20,899	$	11,869	$	6,730

As of June 30, 2020, the Company had $20,899 of unrecognized tax benefits, of which $17,087 represents the amount that, if recognized, would impact the effective tax rate in future periods. As of June 30, 2019 and 2018, the Company had $11,869 and $6,730, respectively, of unrecognized tax benefits of which $8,057 and $2,917, respectively, would impact the effective income tax rate in future periods. Accrued liabilities for interest and penalties were $2,166 and $275 at June 30, 2020 and 2019, respectively. Interest and penalties (expense and/or benefit) are recorded as a component of the provision (benefit) for income taxes in the consolidated financial statements.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and several foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to fiscal 2014. However, to the extent we generated NOLs or tax credits in closed tax years, future use of the NOL or tax credit carryforward balance would be subject to examination within the relevant statute of limitations for the year in which utilized. The Company is no longer subject to tax examinations in the United Kingdom for years prior to fiscal 2017. Given the uncertainty regarding when tax authorities will complete their examinations and the possible outcomes of their examinations, a current estimate of the range of reasonably possible significant increases or decreases of income tax that may occur within the next twelve months cannot be made. Although there are various