v3.26.1
Income Tax
 12 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Tax
12. Income Tax
The Company’s income before income taxes consisted of the following:
Year Ended March 31,
202620252024
Domestic income before income taxes$452,327 $353,992 $276,021 
Foreign income before income taxes10,596 8,285 5,640 
Total income before income taxes$462,923 $362,277 $281,661 
Components of income tax expense consist of the following:
Year Ended March 31,
202620252024
Current:
Federal$39,823 $27,768 $31,551 
State and local3,498 5,619 4,395 
Foreign3,636 3,041 1,811 
Total current income tax expense$46,957 $36,428 $37,757 
Deferred:
Federal$17,955 $14,144 $13,148 
State and local9,921 (1,760)3,556 
Foreign370 (303)(7)
Total deferred income tax expense28,246 12,081 16,697 
Total income tax expense$75,203 $48,509 $54,454 
The Company adopted ASU 2023-09 on a prospective basis. See Note 2 - Summary of Significant Accounting Policies for additional details on the adoption of ASU 2023-09. A reconciliation of the U.S. federal statutory income tax rate to the Company's effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended March 31, 2026 is as follows:
AmountETR
U.S. Federal Statutory Tax Rate$97,214 21.0 %
State and Local Income Tax, Net of Federal (National) Income Tax Effect(1)
10,3822.2 %
Foreign Tax Effects
   Other Jurisdictions1,692 0.4 %
Effect of Changes in Tax Laws or Rates Enacted in the Current Period
Effect of Cross-Border Tax Laws2,637 0.6 %
Tax Credits(1,500)(0.3)%
Changes in Valuation Allowances(6,605)(1.4)%
Nontaxable or Nondeductible Items
      NCI(29,093)(6.3)%
      Other355 0.1 %
Other Adjustments121 — %
Effective tax rate$75,203 16.3 %
(1)State taxes in CA, NY and PA made up the majority (greater than 50 percent) of the tax effect in this category.
A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate is as follows:
Year Ended March 31,
20252024
Federal tax at statutory rate21.0 %21.0 %
State income taxes, net of federal benefit1.2 %2.8 %
NCI(5.6)%(6.4)%
Valuation allowance(4.4)%1.6 %
Other1.2 %0.3 %
Effective tax rate13.4 %19.3 %
The significant components of deferred tax assets are as follows:
Year Ended March 31,
20262025
Basis difference in HLA$306,551 $329,129 
Tax Receivable Agreement54,743 57,255 
Valuation allowance(69,565)(79,432)
State taxes— 394 
Other1,363 1,179 
Total deferred tax assets
$293,092 $308,525 
As of March 31, 2026 and 2025, the Company did not have net operating loss carryforwards.
In connection with the September 2025 Offering and related unit exchanges, the Company recorded a deferred tax asset of $12,402, presented net of a valuation allowance of $1,584 for the portion of tax benefits for which realization is not more likely than not. In conjunction with this recognition, the Company also recorded a payable to related parties of $10,280 pursuant to the tax receivable agreement, recognized through equity.
The Company believes it is more likely than not that the deferred tax assets (except those identified above) will be realized based on the Company’s forecasted income. The net change in the valuation allowance was a decrease of $9,867.
As of March 31, 2026, 2025, and 2024, the Company had no unrecognized tax positions. The Company does not expect any material increase or decrease in its gross unrecognized tax positions during the next twelve months. If and when the Company does record unrecognized tax positions in the future, any interest and penalties related to unrecognized tax positions will be recorded in the income tax expense line in the Consolidated Statements of Income.
The Company files income tax returns as required by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company may be subject to examination by federal and certain state and local tax authorities. As of March 31, 2026, the Company’s federal income tax returns from 2022 remain open and are subject to examination.
Pursuant to the disclosure requirements of ASU 2023-09, the following table summarizes income taxes paid (net of refunds) exceeding five percent of total income taxes paid (net of refunds) in the following jurisdictions:
Year Ended
March 31, 2026
U.S. Federal$44,501 
U.S. State and Local6,363
Foreign3,569 
Total income taxes paid (net of refunds)$54,433 
In December 2021, the Organization for Economic Co-operation and Development (“OECD”) introduced a 15% global minimum tax under the Pillar Two Global Anti-Base Erosion model rules. Several OECD member countries have enacted tax legislation based on certain elements of these rules that became effective on January 1, 2024. Other jurisdictions have announced the intent to implement these rules, but the rules remain subject to significant negotiation, potential change, and phase-in periods. As of March 31, 2026, the Company is not subject to the Pillar Two model rules and will continue to monitor legislative developments and the potential impact on future periods.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States. The OBBBA contains several provisions revising the U.S. federal corporate income tax by, among other things, extending many expiring provisions from the Tax Cuts and Jobs Act of 2017, modifying the international tax framework, and restoring favorable tax treatment for certain business provisions. As of March 31, 2026, the OBBBA did not have a material impact on the Company’s income tax expense.
Tax Receivable Agreement
The Company has recorded a payable to related parties pursuant to the tax receivable agreement of $235,425 and $240,648 as of March 31, 2026 and 2025, respectively. Payments of $12,000 and $11,924 were made during the years ended March 31, 2026 and 2025, respectively. In the event that the valuation allowance related to tax benefits associated with the tax receivable agreement is released in a future period, an additional estimated payable of $28,943 will be due.