INCOME TAXES

12 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

(J) Income Taxes

The provision for income taxes from continuing operations includes the following components:

	For the Years Ended March 31,
	2022		2021		2020
	(dollars in thousands)
Current Provision (Benefit)
Federal	$	87,626	$	67,913	$	(91,304	)
State		6,924		9,587		3,004
		94,550		77,500		(88,300	)
Deferred Provision (Benefit)
Federal		3,491		7,207		108,467
State		2,806		5,239		4,337
		6,297		12,446		112,804
Provision for Income Taxes	$	100,847	$	89,946	$	24,504

The effective tax rates vary from the federal statutory rates due to the following items:

	For the Years Ended March 31,
	2022			2021			2020
	(dollars in thousands)
Earnings Before Income Taxes	$	475,094		$	424,112		$	255,695
Income Taxes at Statutory Rate	$	99,770		$	89,063		$	53,998
Increases (Decreases) in Tax Resulting from
State Income Taxes, net		12,743			11,713			3,579
Statutory Depletion in Excess of Cost		(7,796	)		(5,263	)		(3,078	)
Excess Tax Benefit from Stock Compensation		(3,048	)		(3,229	)		307
Meals and Entertainment Disallowance		279			220			537
Limitation on Officer's Compensation		2,568			1,503			1,018
Impact of CARES Act of 2020		—			—			(35,936	)
Credits		—			(400	)		(2,150	)
Valuation Allowance		(4,556	)		300			2,212
Change in Reserves		—			(2,916	)		4,200
Other		887			(1,045	)		(183	)
Provision for Income Taxes	$	100,847		$	89,946		$	24,504
Effective Tax Rate		21	%		21	%		10	%

Components of deferred income taxes are as follows:

	March 31,
	2022			2021
	(dollars in thousands)
Items Giving Rise to Deferred Tax Liabilities
Excess Tax Depreciation and Amortization	$	(242,335	)	$	(242,235	)
Investment in Joint Venture Basis Differences		(7,813	)		(3,621	)
Depletable Assets		(3,769	)		(6,740	)
Right-of-Use Assets		(5,897	)		(6,506	)
Inventory		(548	)		—
Other		(3,506	)		(2,913	)
Total Deferred Tax Liabilities	$	(263,868	)	$	(262,015	)
Items Giving Rise to Deferred Tax Assets
Change in Accruals	$	13,255		$	13,859
Inventory		—			1,387
Bad Debts		1,600			2,022
Long-term Incentive Compensation Plan		3,252			3,940
Credits and Other Carryforwards		12,747			17,338
Lease Liability		8,849			10,141
Pension		1,001			1,103
Subtotal		40,704			49,790
Valuation Allowance		(9,205	)		(13,761	)
Total Deferred Tax Assets	$	31,499		$	36,029

Prior year amounts in the above table have been reclassified to conform to the current year presentation. We record Deferred Tax Assets and Liabilities based upon estimates of their realizable value with such estimates based upon likely future tax consequences. In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the Deferred Tax Assets. If, based on the weight of available evidence, it is more likely than not that a Deferred Tax Asset will not be realized, we record a Valuation Allowance.

We have state net operating loss carryforwards of $0.9 million at March 31, 2022, and approximately $3.7 million at March 31, 2021, net of valuation allowance. We have state income tax credit carryforwards of $4.3 million at March 31, 2022, and $1.1 million at March 31, 2021, net of Valuation Allowances. The state income tax credits may be carried forward indefinitely.

We file income tax returns in U.S. federal and various state jurisdictions. The Company is currently subject to U.S. federal income tax examinations for the year ended March 31, 2019 and forward.

Uncertain Tax Positions

We are subject to audit examinations at federal, state, and local levels by tax authorities in those jurisdictions who may challenge the treatment or reporting of any return item. The tax matters challenged by the tax authorities are typically complex; therefore, the ultimate outcome of these challenges is subject to uncertainty.

We review and assess all tax positions subject to uncertainty on a more-likely-than-not standard with respect to ultimate outcome if challenged. We measure and record tax benefit or expense only when the more-likely-than-not threshold is met. The change in unrecognized tax benefits for the years ended March 31, 2022, 2021, and 2020 was as follows:

	For the Years Ended March 31,
	2022		2021			2020
	(dollars in thousands)
Balance at Beginning of Year	$	1,284	$	4,200		$	—
Increase Related to Current Tax Positions		—		1,284			4,200
Decrease Related to Current Tax Positions		—		(4,200	)		—
Payments		—		—			—
	$	1,284	$	1,284		$	4,200

We recorded a $4.2 million reserve resulting from of a position we took on our fiscal 2020 federal tax return, which is related to the interest limitation under IRC Section 163(j) and the resulting carryback allowed under the CARES Act. This tax return position reflected an expected update to U.S. Department of the Treasury regulations. During fiscal 2021, the U.S. Department of Treasury issued updated regulations under IRC Section 163(j). As a result, in fiscal 2021 we reversed the reserve recorded in fiscal 2020.

We classify interest and penalties related to uncertain tax positions as current income tax expense. We recorded no interest and penalties for each of the fiscal years ended March 31, 2022, 2021, and 2020.

Tax Cuts and Jobs Act

CARES Act

The CARES Act was enacted on March 27, 2020. The CARES Act, among other changes, allows for a five-year carryback of net operating losses (NOL) generated beginning in 2018 and ending before 2021. In March 2020, we recorded a tax benefit of $35.9 million related to the carryback and utilization of NOLs in prior-year tax periods at higher rates than the current statutory rate.