Income Tax

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Tax

13. Income Tax

The effective tax rate for the three and nine months ended September 30, 2023 was (87.1)% and 116.0% compared to (4.8%) and 131.7% for the same period in 2022. The change in the effective tax rate between the periods resulted primarily due to the change in projected earnings mix by geography and tax jurisdiction as compared to the prior period, changes in valuation allowances in the United States, foreign withholding tax, changes in nondeductible compensation, and the mix of earnings in jurisdictions with differing tax rates.

The Company had approximately $16.8 million in outstanding NOL carryback claims as of December 31, 2022 including the estimated carryback claim relating to the 2020 tax year, which was reflected in “Other current assets” on the consolidated balance sheets. During the three and nine months ended September 30, 2023, the Company received refunds of $16.8 million and $17.2 million, respectively. The third quarter 2023 refund is comprised of the refund amount of $15.5 million and related interest of $1.3 million.

As the Company no longer asserts the indefinite reinvestment assertion, we maintain a deferred foreign tax liability, which had a balance of $1.8 million as of September 30, 2023 and is primarily related to estimated foreign withholding tax associated with repatriating all non-U.S. earnings back to the United States.

The Company operates in multiple jurisdictions with complex tax and regulatory environments and our tax returns are periodically audited or subjected to review by tax authorities. We monitor tax law changes and the potential impact to our results of operations.