v3.25.2
Income Taxes
 12 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
We file a consolidated federal income tax return. Taxes based on income for the years ended June 30 have been provided as follows:
202520242023
Currently payable:
Federal$48,714 $51,687 $20,147 
State and local3,491 5,485 3,978 
Total current provision52,205 57,172 24,125 
Deferred federal, state and local (benefit) provision(6,089)(10,270)7,886 
Total taxes based on income$46,116 $46,902 $32,011 
For the years ended June 30, our effective tax rate varied from the statutory federal income tax rate as a result of the following factors:
202520242023
Statutory rate21.0 %21.0 %21.0 %
State and local income taxes1.1 1.9 2.4 
Research and development tax credit(1.1)(0.7)(1.1)
Net windfall tax benefits - stock-based compensation(0.1)— (0.4)
Other0.7 0.6 0.4 
Effective rate21.6 %22.8 %22.3 %
Our net deferred tax liability for all periods presented has been classified as noncurrent. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at June 30 were comprised of:
20252024
Deferred tax assets:
Section 174 research and development capitalization$15,172 $11,910 
Operating lease liabilities11,820 12,245 
Employee medical and other benefits8,352 8,431 
Receivables5,086 4,202 
Inventories2,340 3,688 
Intangible assets1,932 2,185 
Other accrued liabilities960 1,161 
Total deferred tax assets45,662 43,822 
Deferred tax liabilities:
Property, plant and equipment(47,536)(49,053)
Goodwill(20,650)(19,571)
Operating lease right-of-use assets(11,591)(12,474)
Total deferred tax liabilities(79,777)(81,098)
Net deferred tax liability$(34,115)$(37,276)
Prepaid federal income taxes of $0.1 million and $0.8 million were included in Other Current Assets at June 30, 2025 and 2024, respectively. Prepaid state and local income taxes of $0.6 million were included in Other Current Assets at June 30, 2025. Accrued state and local income taxes of $0.3 million were included in Accrued Liabilities at June 30, 2024.
Net cash payments for income taxes for each of the years ended June 30 were as follows:
202520242023
Net cash payments for income taxes$52,515 $53,583 $26,327 
The gross tax contingency reserve at June 30, 2025 was $0.7 million and consisted of estimated tax liabilities of $0.2 million and interest and penalties of $0.5 million. The unrecognized tax benefits recorded as the gross tax contingency reserve noted in the following table for June 30, 2025 and 2024 would affect our effective tax rate, if recognized.
The following table sets forth changes in our total gross tax contingency reserve (including interest and penalties):
20252024
Balance, beginning of year$802 $858 
Tax positions related to the current year:
Additions— — 
Reductions— — 
Tax positions related to prior years:
Additions30 34 
Reductions(85)(90)
Settlements— — 
Balance, end of year$747 $802 
We have not classified any of the gross tax contingency reserve at June 30, 2025 in Accrued Liabilities as none of these amounts are expected to be resolved within the next 12 months. Consequently, the entire liability of $0.7 million was included in Other Noncurrent Liabilities. We expect that the amount of these liabilities will change within the next 12 months; however, we do not expect the change to have a significant effect on our financial position or results of operations.
We recognize interest and penalties related to these tax liabilities in income tax expense. For each of the years ended June 30, we recognized the change in the accrual for net tax-related interest and penalties as follows:
20252024
Benefit recognized for net tax-related interest and penalties$(11)$(10)
We had accrued interest and penalties at June 30 as follows:
20252024
Accrued interest and penalties included in the gross tax contingency reserve$473 $484 
We file federal and various state and local income tax returns in the United States. With limited exceptions, we are no longer subject to examination of U.S. federal or state and local income taxes for years prior to 2022.