Income Taxes

6 Months Ended

Oct. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Note 11. Income Taxes

The provision for income taxes during interim reporting periods is calculated by applying an estimate of the annual effective tax rate to “ordinary” income or loss for the reporting period, adjusted for discrete items. Due to various factors, including our estimate of annual income, our effective tax rate is subject to fluctuation.

Our effective tax rate for the three and six months ended October 31, 2020 was 41.1 percent and 26.2 percent, respectively, as compared to an effective tax rate benefit of 63.8 percent and 14.6 percent for the three and six months ended November 2, 2019. The change in the effective tax rates are primarily driven by a decrease in tax credits and other permanent differences as a percentage of estimated current fiscal year pre-tax income.

We are subject to U.S. federal income tax as well as income taxes of multiple state and foreign jurisdictions. Fiscal years 2017, 2018, 2019 and 2020 remain open to federal tax examinations, and fiscal years 2016, 2017, 2018, 2019 and 2020 remain open for various state income tax examinations.  Certain subsidiaries are also subject to income tax in several foreign jurisdictions which have open tax years varying by jurisdiction beginning in fiscal 2009. In the event of any future tax assessments, we have elected to record the income taxes and any related interest and penalties as income tax expense in our condensed consolidated statement of operations.

As of October 31, 2020, undistributed earnings of our foreign subsidiaries are considered to be reinvested indefinitely. Additionally, we had $697 of unrecognized tax benefits which would reduce our effective tax rate if recognized.