Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

6. Income Taxes

Our effective tax rate was 22.0% and 22.9% for the three months ended June 30, 2022 and 2021, respectively, and 17.2% and 17.8% for the six months ended June 30, 2022 and 2021, respectively. The decrease in the effective tax rate for three months ended June 30, 2022 is due to a settlement of a tax contingency reserve, offset by a decrease in excess tax benefits on restricted stock vesting as a percentage of pretax income. The decrease in the effective tax rate for the six months ended June 30, 2022 is due to the same settlement of a tax contingency reserve offset by a decrease of excess tax benefits on restricted stock vesting.

We apply the provisions for income taxes related to, among other things, accounting for uncertain tax positions and disclosure requirements in accordance with Accounting Standards Classification (ASC) 740, Income Taxes. For the three months ended June 30, 2022, our uncertain tax positions decreased by $0.7 million due to settlement of a tax contingency. There has been no change to our policy that recognizes potential interest and penalties related to uncertain tax positions within our global operations in income tax expense.

We conduct business globally and, as a result, file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, Manhattan is subject to examination by taxing authorities throughout the world.  We are no longer subject to the U.S. federal, substantially all state and local income tax examinations and substantially all non-U.S. income tax examinations for years before 2010.