Income Taxes |
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May 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes |
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 earnings (loss) before income taxes, income tax (benefit) expense and effective income tax rates from continuing operations are as follows (in thousands):
The Company’s earnings (loss) from continuing operations before income taxes include earnings from foreign jurisdictions of approximately 75% of the consolidated total for each of the estimated full-year fiscal 2021 and full-year 2020. Though most foreign tax rates are now in line with the U.S. tax rate of 21%, the annual effective tax rate is impacted by withholding taxes, losses in jurisdictions where no benefit can be realized, and various aspects of the U.S. Tax Cuts and Jobs Act, such as the Global Intangible Low-Taxed Income, Foreign-Derived Intangible Income and Base Erosion and Anti-Abuse Tax provisions.
The effective tax rate for the three months ended May 31, 2021 was (21.0)%, compared to 7.6% for the comparable prior-year period. The effective tax rate for the current-year period was impacted by a $5 million benefit driven by tax planning strategies and the carryback of net losses that offset income from taxable years where the rate was 35%. In addition, an $8 million benefit was driven by uncertain tax position releases due to audit closures. These benefits were offset by a $3 million tax expense related to the gain on sale of our manufacturing facility in China (see Note 15, "Leases"). The prior-year period was impacted by decreased profitability due to the COVID-19 pandemic, the impact of benefits related to uncertain tax position releases due to expirations of statute of limitations, and valuation allowance releases associated with the ability to use tax attributes before expiration. Both the current and prior-year effective income tax rates were impacted by tax benefits that are non-recurring and not anticipated to impact future years.
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