Income Taxes

9 Months Ended

Jun. 28, 2020

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The effective tax rate for the three and nine month periods ended June 28, 2020 and June 30, 2019 was as follows:

	Three Month Periods Ended				Nine Month Periods Ended
Effective tax rate	June 28, 2020		June 30, 2019		June 28, 2020		June 30, 2019
SBH	28.0	%	225.8	%	46.4	%	(20.3)	%
SB/RH	30.3	%	236.5	%	285.4	%	(131.4)	%

The estimated annual effective tax rate applied to the three and nine month periods ended June 28, 2020 differs from the US federal statutory rate of 21% principally due to income earned outside the U.S. that is subject to U.S. tax, including the U.S. tax on global intangible low taxed income (“GILTI”), net operating losses outside the U.S. that are not more likely than not to result in a tax benefit, certain nondeductible expenses, and foreign rates that differ from the US federal statutory rate. The Company has U.S. net operating loss carryforwards, which do not allow it to take advantage of the foreign-derived intangible income (“FDII”) deduction. The Company’s federal effective tax rate on GILTI is therefore 21%. During the three and nine month periods ended June 28, 2020, the Company recorded a $5.2 million tax benefit related to U.S. return to provision differences, primarily from changes in estimates of GILTI, which is recorded as a period cost. During the nine month period ended June 28, 2020, the Company also recognized a $5.3 million tax benefit from the favorable settlement for non-U.S.income tax examination for fiscal years preceding Fiscal 2019.

As of June 28, 2020, there is $2.8 million of income taxes payable on the SB/RH Condensed Consolidated Statement of Financial Position, payable to its parent company, calculated as if SB/RH were a separate taxpayer.

On July 20, 2020, the US Treasury and the Internal Revenue Service issued Final Regulations under Internal Revenue Code Section 951A relating to the treatment of income that is subject to a high rate of tax under the GILTI regime. The Regulations are effective for Fiscal 2021, but the Company can elect to apply them to Fiscal 2019 and Fiscal 2020. The Company is in the process of reviewing and estimating the impact of the Regulations, but there is a reasonable possibility that application of the Regulations could have a material effect on the Company’s Fiscal 2020 income tax expense. The Company expects to record the impacts to Fiscal 2020 during the fourth quarter.