|9 Months Ended|
May 31, 2020
|Income Tax Disclosure [Abstract]|
Note 12. Income Taxes
The Company's global operations, acquisition activity and specific tax attributes provide opportunities for continuous global tax planning initiatives to maximize tax credits and deductions. Comparative (loss) earnings before income taxes, income tax (benefit) expense and effective income tax rates from continuing operations are as follows (in thousands):
The Company’s (loss) earnings from continuing operations before income taxes includes earnings from foreign jurisdictions in excess of 70% of the consolidated total for the estimated full-year fiscal 2020 and 2019. Overall, the annual effective tax rate is not significantly impacted by differences in foreign tax rates now that the U.S. tax rate of 21% is in line with the Company's average foreign tax rate. Both the current and prior-year effective income tax rates were impacted by impairment & divestiture charges (benefits) as well as accelerated debt issuance costs and purchase accounting charges in the current year ("one-time charges (benefits)"). Results included one-time charges (benefits) of $(1.2) million ($(0.8) million) after tax) and $(2.5) million ($(1.8) million after tax) for the three and nine months ended May 31, 2020, respectively. This compares to one-time charges (benefits) of $(13.0) million ($(13.0) million after tax) and $14.0 million ($14.0 million after tax) for the three and nine months ended May 31, 2019, respectively. Excluding the one-time charges (benefits), the effective tax rate was 12.8% and 26.1% for the three months ended May 31, 2020 and 2019, respectively, and 14.5% and 26.2% for the nine months ended May 31, 2020 and 2019, respectively. The income tax expense without one-time charges (benefits) for the three and nine months ended May 31, 2020 is greatly impacted by decreased profitability due to the COVID-19 pandemic and the impact of non-recurring benefits related to the reduction in tax reserves due to the lapsing of statutes of limitations and valuation allowance releases associated with the ability to use tax attributes before expiration.
On March 27, 2020, the U.S. government enacted tax legislation containing provisions to support businesses during the COVID-19 pandemic (the “CARES Act”), including deferment of the employer portion of certain payroll taxes, refundable payroll tax credits, and technical amendments to tax depreciation methods for qualified improvement property. The CARES Act did not have a material impact on our consolidated financial statements for the three or nine months ended May 31, 2020. We are currently evaluating the future impact of the CARES Act provisions on our consolidated financial statements.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef