INCOME TAXES

3 Months Ended

Jan. 02, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The effective tax rate for the three month periods ended January 2, 2022 and January 3, 2021 was as follows:

	Three Month Periods Ended
Effective tax rate	January 2, 2022		January 3, 2021
SBH	34.7	%	(34.9)	%
SB/RH	34.5	%	(32.6)	%

The estimated annual effective tax rate applied to the three month period ended January 2, 2022 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”), certain nondeductible expenses, foreign rates that differ from the US federal statutory rate, and state income taxes. The Company has U.S. net operating loss carryforwards, which do not allow it to take advantage of the foreign-derived intangible income deduction. The Company’s federal effective tax rate on GILTI is therefore 21%.

During the three month period ended January 2, 2022, the Company recorded a $3.2 million tax benefit as an adjustment to the estimated benefit recorded in Fiscal 2021 for the Final Regulations issued 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 Company completed and filed the amended return implementing these Regulations during the three month period ending January 2, 2022. The Company also recorded a $2.5 million tax benefit during the three month period ended January 2, 2022 for windfalls associated with the vesting of share compensation during the quarter. The Company generated a pretax loss on continuing operations in the fiscal quarter, so additional discrete tax benefits result in an increase to the quarter’s tax rate.

As of January 2, 2022, and September 30, 2021, there was $1.8 million of income tax receivable and $8.0 million of income taxes payable, respectively, with its parent company, on the SB/RH Condensed Consolidated Statements of Financial Position, calculated as if SB/RH were a separate taxpayer.