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Income Tax

6 Months Ended

Mar. 31, 2021

12. Income Tax

For the three months ended March 31, 2021 and 2020, our effective tax rates were 25.8% and 38.2%, respectively, and for the six months ended March 31, 2021 and 2020, our effective tax rates were 26.5% and 29.5%, respectively. The decrease in the effective tax rates was primarily a result of the establishment of a valuation allowance in a foreign subsidiary in the prior year. Additionally, we had greater losses in the prior year from foreign subsidiaries for which a tax benefit could not be recognized.

Refer to the following rate reconciliation for more details relating to the period over period differences in the effective tax rate:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2021			2020			2021			2020
U.S. federal statutory income tax rate		21.0	%		21.0	%		21.0	%		21.0	%
State income taxes, net of federal tax benefit		3.7			4.4			3.4			3.6
Effect of foreign operations		(0.1	)		0.1			0.8			0.9
Foreign valuation allowances		1.2			15.9			0.3			3.9
Other, net		—			(3.2	)		1.0			0.1
Effective tax rate		25.8	%		38.2	%		26.5	%		29.5	%

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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