Paychex 2011 Annual Report Download - page 72

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The components of the provision for income taxes are as follows:
In millions 2011 2010 2009
Year ended May 31,
Current:
Federal .............................................. $234.0 $230.2 $256.1
State ................................................ 29.3 26.0 24.4
Total current ......................................... 263.3 256.2 280.5
Deferred:
Federal .............................................. 12.0 (3.9) (1.3)
State ................................................ 1.6 — (0.6)
Total deferred ........................................ 13.6 (3.9) (1.9)
Provision for income taxes ................................ $276.9 $252.3 $278.6
A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows:
2011 2010 2009
Year ended May 31,
Federal statutory tax rate ........................................ 35.0% 35.0% 35.0%
Increase/(decrease) resulting from:
State income taxes, net of federal tax benefit........................ 2.5 2.3 1.9
Tax-exempt municipal bond interest .............................. (2.2) (2.7) (2.6)
Other items ................................................ (0.3) — —
Effective income tax rate ....................................... 35.0% 34.6% 34.3%
Uncertain income tax positions: The Company maintains a reserve for uncertain tax positions. As of
May 31, 2011 and May 31, 2010, the total reserve for uncertain tax positions was $34.4 million and $27.5 million,
respectively. As of May 31, 2011 and May 31, 2010, $34.1 million and $27.5 million of the total reserve for
uncertain tax positions was included in long-term liabilities on the Consolidated Balance Sheets.
56
PAYCHEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)