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INCOME TAXES
 12 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES
NOTE 19. INCOME TAXES
Income taxes are recognized for the amount of taxes payable for the current year and for the impact of deferred tax assets and liabilities, which represent future tax consequences of events that have been recognized differently in the financial statements than for tax purposes. Deferred tax assets and liabilities are established using the enacted statutory tax rates and are adjusted for any changes in such rates in the period of change.
Income before income tax expense from continuing operations was attributable to the following jurisdictions:
For the fiscal years ended June 30,
202520242023
(in millions)
U.S.$213 $148 $74 
Foreign710 437 306 
Income before income tax expense from continuing operations$923 $585 $380 
The significant components of the Company’s income tax expense were as follows:
For the fiscal years ended June 30,
202520242023
(in millions)
Current
U.S.
Federal$— $1 $1 
State & Local12 10 15 
Foreign180 165 125 
Total current tax192 176 141 
Deferred
U.S.
Federal29 22 (10)
State & Local9 3 — 
Foreign45 5 21 
Total deferred tax83 30 11 
Total income tax expense$275 $206 $152 
The reconciliation between the Company’s actual effective tax rate and the statutory U.S. Federal income tax rate was as follows:
For the fiscal years ended June 30,
202520242023
U.S. federal income tax rate21 %21 %21 %
State and local taxes, net2 2 3 
Effect of foreign operations (a)
10 12 15 
Change in valuation allowance
— — 1 
Non-deductible goodwill and asset impairments— 1 2 
Non-deductible compensation and benefits1 2 2 
R&D tax credits(1)(3)(2)
Impact of dispositions(3)— — 
Other— — (2)
Effective tax rate30 %35 %40 %
(a)The Company’s effective tax rate is impacted by the geographic mix of its income. The Company’s foreign operations are located primarily in Australia and the U.K., which have a higher statutory income tax rate than the U.S. The U.K. had a lower tax rate than the U.S. through the fiscal year ended June 30, 2023.
The Company recognized deferred income taxes in the Balance Sheets as follows:
As of June 30,
20252024
(in millions)
Deferred income tax assets
$254 $332 
Deferred income tax liabilities
(57)(21)
Net deferred tax assets$197 $311 
The significant components of the Company’s deferred tax assets and liabilities were as follows:
As of June 30,
20252024
(in millions)
Deferred tax assets
Accrued liabilities$137 $121 
Capital loss carryforwards1,723 1,161 
Net operating loss carryforwards222 295 
Business tax credits122 147 
Operating lease liabilities244 241 
Other217 227 
Total deferred tax assets2,665 2,192 
Deferred tax liabilities
Asset basis difference and amortization(135)(99)
Operating lease right-of-use asset(224)(220)
Other(21)(21)
Total deferred tax liabilities(380)(340)
Net deferred tax asset before valuation allowance2,285 1,852 
Less: valuation allowance (See Note 22—Valuation and Qualifying Accounts)
(2,088)(1,541)
Net deferred tax assets$197 $311 
Significant judgment is applied in determining the ability to realize our deferred tax assets. Management assesses available positive and negative evidence, including historical results and future income forecasts to determine whether deferred tax assets will be realized. Based on its assessment, management has concluded that it is more likely than not that certain deferred tax assets may not be realized and therefore, a valuation allowance has been established against those tax assets. Certain of our businesses may incur losses in the future resulting in additional valuation allowances being recorded.
As of June 30, 2025, the Company had income tax net operating loss (“NOL”) carryforwards (gross, net of uncertain tax benefits) in various jurisdictions as follows:
JurisdictionExpirationAmount
(in millions)
U.S. Federal2026 to 2035$61 
U.S. StatesVarious516 
AustraliaIndefinite154 
U.K.Indefinite11 
Other ForeignVarious602 
Utilization of the NOLs is dependent on generating sufficient taxable income from our operations in each of the respective jurisdictions to which the NOLs relate, while taking into account tax filing groups and limitations and/or restrictions on our ability to use them. Certain of our U.S. federal NOLs were acquired as part of the acquisition of Move and are subject to limitations as promulgated under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). Section 382 of the Code limits the amount of NOLs that we can use on an annual basis to offset consolidated U.S. taxable income. The NOLs are also subject to review by relevant tax authorities in the jurisdictions to which they relate.
The Company recorded a deferred tax asset of $222 million and $295 million associated with its NOLs (net of approximately $77 million and $81 million, respectively, of uncertain tax benefits recorded against deferred tax assets) as of June 30, 2025 and 2024, respectively.
Valuation allowances of $136 million and $134 million have been established to reduce the deferred tax asset associated with the Company’s NOLs to an amount that will more likely than not be realized as of June 30, 2025 and 2024, respectively.
As of June 30, 2025, the Company had approximately $3.4 billion, $1.7 billion and $1.1 billion of capital loss carryforwards in Australia, the U.K. and the U.S., respectively. The Australia and U.K. capital losses may be carried forward indefinitely. The U.S. capital loss expires in the fiscal year ending June 30, 2030. The capital loss carryforwards are also subject to review by relevant tax authorities in the jurisdictions to which they relate. Realization of our capital losses is dependent on generating capital gain taxable income and satisfying certain continuity of ownership and/or business requirements. The Company recorded a deferred tax asset of $1.7 billion and $1.2 billion as of June 30, 2025 and 2024, respectively, for these capital loss carryforwards. It is more likely than not that the Company will not generate capital gain income in the normal course of business in these jurisdictions, and accordingly, valuation allowances of $1.7 billion and $1.2 billion and have been established to reduce the capital loss carryforward deferred tax asset to an amount that will more likely than not be realized as of June 30, 2025 and 2024, respectively.
As of June 30, 2025, the Company had approximately $105 million of U.S. federal tax credit carryforwards which includes $31 million of foreign tax credits and $74 million of general business credits, which begin to expire in 2026 and 2036, respectively.
As of June 30, 2025, the Company had approximately $9 million of non-U.S. tax credit carryforwards which expire in various amounts beginning in 2027 and $8 million of state tax credit carryforwards (net of U.S. federal benefit), which expire in various amounts beginning in 2025.
A valuation allowance of $28 million has been established to reduce the deferred tax asset associated with the Company’s U.S. federal tax credits, non-U.S. tax credits and state tax credit carryforwards to an amount that will more likely than not be realized as of June 30, 2025.
Uncertain Tax Positions
The following table sets forth the change in the Company’s unrecognized tax benefits, excluding interest and penalties:
For the fiscal years ended June 30,
202520242023
(in millions)
Balance, beginning of period$100 $105 $86 
Additions for prior year tax positions2 — 14 
Additions for current year tax positions2 2 17 
Reduction for prior year tax positions(4)(3)— 
Reduction for current year tax positions(1)— — 
Lapse of the statute of limitations(3)(3)(2)
Settlement—tax attributes— — (14)
Impact of currency translations7 (1)4 
Balance, end of period$103 $100 $105 
The Company recognizes interest and penalty charges related to unrecognized tax benefits as income tax expense, which is consistent with the recognition in prior reporting periods. The Company recognized an expense related to interest and penalties of $3 million for the fiscal year ended June 30, 2025 and $1 million for each of the fiscal years ended June 30, 2024 and 2023. The Company recorded liabilities for accrued interest and penalties of approximately $10 million, $7 million and $5 million as of June 30, 2025, 2024 and 2023, respectively.
The Company’s tax returns are subject to on-going review and examination by various tax authorities. Tax authorities may not agree with the treatment of items reported in our tax returns, and therefore the outcome of tax reviews and examinations can be unpredictable. The Company is currently undergoing tax examinations in various U.S. states and foreign jurisdictions. The Company believes it has appropriately accrued for the expected outcome of uncertain tax matters and believes such liabilities represent a reasonable provision for taxes ultimately expected to be paid. However, the Company may need to accrue additional income tax expense and our liability may need to be adjusted as new information becomes known and as these tax examinations continue to progress, or as settlements or litigations occur.
The following is a summary of major tax jurisdictions for which tax authorities may assert additional taxes based upon tax years currently under audit and subsequent years that could be audited by the respective taxing authorities.
JurisdictionFiscal Years Open to Examination
U.S. Federal
2022-2024
U.S. States
Various
Australia
2021-2024
U.K.
2000, 2003, 2005 and 2012-2024
It is reasonably possible that uncertain tax positions may increase or decrease in the next fiscal year, however, actual developments in this area could differ from those currently expected. As of June 30, 2025, approximately $32 million would affect the Company’s effective income tax rate, if and when recognized in future fiscal years. It is reasonably possible that the amount of uncertain tax liabilities which may be resolved within the next fiscal year is between the range of approximately nil and $67 million, a portion of which will affect our effective income tax rate, primarily as a result of the settlement of tax examinations and the lapsing of statutes of limitations.
Other
On July 4, 2025, H.R. 1 - One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act (“Tax Act”), including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. Certain provisions of OBBBA will become effective for the Company’s 2026 fiscal year, while others will take effect beginning in fiscal 2027. ASC 740 requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. Consequently, the Company will evaluate all U.S. deferred tax balances and any other impacts to its financial statements as a result of the OBBBA in the first quarter of fiscal 2026.
The Organization for Economic Cooperation and Development (“OECD”) has proposed a global minimum tax of 15% of reported profits (“Pillar 2”) that has been agreed upon in principle by over 140 countries. Since the proposal, many countries, including the U.K. and Australia, incorporated Pillar 2 model rule concepts into their domestic laws. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar 2 slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar 2. Following an executive order issued by the United States in January 2025 announcing opposition to aspects of these rules, the G7 issued a statement on June 28, 2025 acknowledging that U.S. parented groups would be exempt from certain aspects of Pillar 2 in recognition of existing U.S. minimum tax rules to which they are subject. The statement acknowledges that these issues have relevance to the wider group of countries in the OECD Inclusive Framework with a view to reaching an acceptable solution for all.
While these rules are not currently expected to have a material impact on the Company’s results of operations, their application continues to evolve, and the outcome may alter aspects of how the Company’s tax obligations are determined in countries in which it does business. In addition, while several jurisdictions have rolled back their digital services taxes, certain jurisdictions continue to maintain, or have enacted new digital services taxes. Those taxes have had limited impact on the Company’s overall tax obligations, but the Company continues to monitor them.
Prior to the enactment of the Tax Act, the Company’s undistributed foreign earnings were considered permanently reinvested and as such, United States federal and state income taxes were not previously recorded on these earnings. As a result of the Tax Act, substantially all of the Company’s earnings in foreign subsidiaries generated prior to the enactment of the Tax Act were deemed to have been repatriated and taxed accordingly. As of June 30, 2025, the Company has approximately $1 billion of undistributed foreign earnings generated after the Tax Act that it intends to reinvest permanently. It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated. The Company may repatriate future earnings of certain foreign subsidiaries in which case the Company may be required to accrue and pay additional taxes, including any applicable foreign withholding taxes and income taxes.
During the fiscal years ended June 30, 2025, 2024 and 2023, the Company paid gross income taxes of $208 million, $156 million and $149 million, respectively, and received income tax refunds of $4 million, $17 million and $13 million, respectively.