Income Taxes

6 Months Ended

Mar. 27, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management's best assessment of estimated current and future taxes to be paid. We are subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.

Unrecognized Tax Benefit

As of March 27, 2020, the total amount of gross unrecognized tax benefits was $111.5 million, of which $73.1 million, if recognized, would reduce our effective tax rate. As of September 27, 2019, the total amount of gross unrecognized tax benefits was $108.5 million, of which $72.8 million, if recognized, would reduce our effective tax rate. Our net liability for unrecognized tax benefits is classified within other non-current liabilities in our consolidated balance sheets.

Effective Tax Rate

Each period, a combination of different factors can impact our effective tax rate. These factors include both recurring items such as tax rates and the relative amount of income earned in foreign jurisdictions, as well as discrete items such as changes to our uncertain tax positions, that may occur in, but are not necessarily consistent between periods.

Our effective tax rate in the second quarter of fiscal 2020 was 20.0% or a tax expense of $22.1 million, compared to our Federal statutory rate of 21%. The decrease from the Federal statutory rate was primarily due to tax benefits relating to stock-based compensation. Compared to our effective tax rate in the second quarter of fiscal 2019 of 33.1% or a tax expense of $36.4 million, the decrease in our tax expense was primarily due to an expense in fiscal 2019 related to an increase to our provisional Tax Act amount in the second quarter of fiscal 2019 which did not recur in fiscal 2020.

Our effective tax rate in the second quarter of fiscal 2020 year-to-date period was 16.9% or a tax expense of 28.0 million, compared to our Federal statutory rate of 21%. The decrease from the Federal statutory rate was primarily due to tax benefits relating to stock-based compensation. Compared to our effective tax rate in the second quarter of fiscal 2019 year-to-date period of 6.7% or a tax expense of 12.3 million, the increase in our tax expense was primarily due to a benefit in fiscal 2019 related to a reduction to our provisional Tax Act amount in the first quarter of fiscal 2019 which did not recur in fiscal 2020.