INCOME TAXES

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

For the three and nine months ended September 30, 2022, the Company calculated its effective tax rate estimating its annual effective tax rate, as opposed to the three and nine months ended September 30, 2021 whereby the Company calculated its effective tax rate based on year-to-date results. The Company’s effective tax rate for the three and nine months ended September 30, 2022 was 28.6% and 28.7%, respectively, including the impact of discrete items, and 28.6% and 29.3%, respectively, excluding discrete items. The Company's effective tax rate for the three and nine months ended September 30, 2021 was 4.9% and 9.1%, respectively, including the impact of discrete items, and 4.9% and 5.9%, respectively, excluding discrete items. The effective tax rate for the three and nine months ended September 30, 2022 was primarily impacted by federal and state taxes. As a result of the Company's valuation allowance on substantially all of its domestic deferred tax assets, the effective tax rate for the three and nine months ended September 30, 2021 was primarily impacted by international taxes and state taxes, while the effective tax rate for the nine months ended September 30, 2021 was also impacted by additional valuation allowance required as a result of the WSG acquisition.

During the fourth quarter of 2021, the Company concluded that it was more likely than not that a benefit from a substantial portion of its United States federal and state deferred tax assets would be realized and released the majority of its valuation allowance. As of December 31, 2021, the Company had an immaterial amount of valuation allowance on its deferred tax assets related to state net operating losses not expected to be realized before expiration. There was no valuation allowance related to state net operating losses as of September 30, 2022.

On August 16, 2022, President Biden signed the Inflation Reduction Act (the IRA) into law in the U.S. Among other changes, the IRA introduced an excise tax on certain stock repurchases by certain covered corporations for taxable years beginning after December 31, 2022. Based on its current estimates and pending future guidance to be issued by the Internal Revenue Service, the Company does not believe these provisions will have a material impact on its consolidated financial statements.

The tax years 2012 through 2021 remain open to examination by certain taxing jurisdictions to which the Company is subject to tax.