Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2020 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes For the three months ended September 30, 2020 and 2019, our provision (benefit) for income taxes, as a percentage of income before income taxes was (16.7) percent and 60.9 percent, respectively, compared with a U.S. federal statutory rate of 21.0 percent. For the nine months ended September 30, 2020 and 2019, our provision for income taxes, as a percentage of income before income taxes was 14.2 percent and 49.2 percent, respectively, compared with a U.S. federal statutory rate of 21.0 percent.
The difference between the effective tax rate and the U.S. federal statutory tax rate for the three months ended September 30, 2020, was primarily attributed to a decrease in tax liability associated with uncertain tax positions and release of valuation allowance for deferred tax assets expected to be utilized in the current year. The difference between the effective tax rate and the U.S. federal statutory tax rate for the nine months ended September 30, 2020, was primarily attributed to a decrease in tax liability associated with uncertain tax positions and release of valuation allowance for deferred tax assets expected to be utilized in the current year, partially offset by transfer pricing adjustments and current year foreign losses that presently do not provide future tax benefit, as well as net unfavorable foreign tax related items.
The difference between the effective tax rate and the U.S. federal statutory tax rate for the three and nine months ended September 30, 2019, was primarily attributed to stock option expenses not deductible for tax purposes, foreign losses during those periods that were not expected to provide future tax benefit, as well as net unfavorable foreign tax related items, partially offset by a decrease in tax liability associated with uncertain tax positions.
The difference between the effective tax rate for the three and nine months ended September 30, 2020 compared to September 30, 2019 is primarily caused by a decrease in tax liability associated with uncertain tax positions, stock option expenses not deductible for tax in the prior period which did not repeat in the current period, and release of valuation allowance for deferred tax assets expected to be utilized in the current year.
As the U.S. Department of the Treasury is working on finalizing Treasury Regulations with respect to the Tax Cuts and Jobs Act (Tax Reform Act), future changes could likewise affect recorded deferred tax assets and liabilities in later periods. Management is not aware of any such additional changes that would have a material effect on our results of operations, cash flows or financial position.
Our U.S. federal income tax returns for 2017 through 2019 are open to examination for federal tax purposes. We have several foreign tax jurisdictions that have open tax years from 2014 through 2019.
As of September 30, 2020 and December 31, 2019, we had accrued $0.1 million and $1.5 million, respectively, related to unrecognized tax positions.
Interim income taxes are based on an estimated annualized effective tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. Although we believe our tax estimates are reasonable, we can make no assurance that the final tax outcome of these matters will not be different from that which we have reflected in our historical income tax provisions and accruals. Such differences could have a material impact on our income tax provision and operating results in the period in which we make such determination.
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