v3.24.3
Income Taxes
 12 Months Ended
Aug. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax expense consisted of the following:
(in millions)202420232022
Current
Federal$10.4 $38.2 $105.9 
State6.9 8.8 24.9 
Total17.3 47.0 130.8 
Deferred
Federal7.1 15.9 (5.6)
State1.0 0.4 (1.1)
Total8.1 16.3 (6.7)
Provision for income taxes$25.4 $63.3 $124.1 
As of August 31, 2024 and August 26, 2023, $6.8 million and $10.7 million of U.S. federal income taxes receivable was included in prepaid expenses and other current assets on the Consolidated Balance Sheets, respectively.

A reconciliation of the U.S. statutory income tax rate to our effective income tax rate is as follows:
202420232022
U.S. federal statutory rate21.0 %21.0 %21.0 %
State taxes, net of federal benefit8.4 %3.1 %3.5 %
Income tax credits(8.9)%(1.1)%(0.5)%
Non-deductible compensation6.6 %1.1 %0.9 %
Non-deductible debt inducement19.4 %— %— %
Non-deductible goodwill impairment16.6 %— %— %
Valuation allowance5.0 %— %— %
Tax-free and dividend income(1.1)%(0.1)%(0.1)%
Uncertain tax position settlements and adjustments(1.7)%0.1 %(0.1)%
Other items0.9 %(1.4)%(0.6)%
Effective tax provision rate66.2 %22.7 %24.1 %

Our effective tax rate increased to 66.2% in Fiscal 2024 compared to 22.7% in Fiscal 2023 primarily due to the impact of the non-deductible debt inducement loss and non-deductible goodwill impairment over a lower pretax income.

The tax effects of temporary differences that give rise to deferred income taxes were as follows:
(in millions)August 31, 2024August 26, 2023
Warranty reserves$19.3 $23.5 
Deferred compensation2.5 2.4 
Self-insurance reserve4.4 5.1 
Stock-based compensation4.5 4.2 
Leases15.0 13.8 
Convertible notes16.5 5.8 
Capitalized research and development costs23.8 11.1 
Other18.1 13.9 
Valuation allowance(1.9)— 
Total deferred tax assets102.2 79.8 
Intangibles61.5 50.5 
Depreciation30.2 28.7 
Leases13.5 12.3 
Total deferred tax liabilities105.2 91.5 
Total deferred income tax liabilities, net$3.0 $11.7 

Changes in the unrecognized tax benefits are as follows:
(in millions)202420232022
Balance at beginning of year$5.5 $5.0 $5.5 
Gross decreases-tax positions in a prior year(1.7)(1.5)(1.1)
Gross increases-tax positions in a prior year0.2 1.0 — 
Gross increases-current year tax positions0.9 1.0 0.6 
Balance at end of year4.9 5.5 5.0 
Accrued interest and penalties0.5 0.6 0.7 
Total unrecognized tax benefits$5.4 $6.1 $5.7 

The amount of unrecognized tax benefits is not expected to change materially within the next 12 months. If the remaining uncertain tax positions are ultimately resolved favorably, $5.1 million of unrecognized tax benefits would have a favorable impact on our
effective tax rate. It is our policy to recognize interest and penalties accrued relative to unrecognized tax benefits in income tax expense.
We file a U.S. Federal tax return, as well as returns in various international and state jurisdictions. Although certain years are no longer subject to examination by the Internal Revenue Service ("IRS") and various state taxing authorities, net operating loss carryforwards generated in those years may still be adjusted upon examination by the IRS or state taxing authorities. As of August 31, 2024, our federal returns from Fiscal 2021 to present are subject to review by the IRS. With limited exception, state returns from Fiscal 2020 to present continue to be subject to review by state taxing jurisdictions. Several years may lapse before an uncertain tax position is audited and finally resolved and it is difficult to predict the outcome of such audits. We believe we have adequately reserved for our exposure to potential additional payments for uncertain tax positions in our liability for unrecognized tax benefits.