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Income Taxes
9 Months Ended
Sep. 30, 2018
Entity Information [Line Items]  
Income Taxes
INCOME TAXES
The Corporation’s taxable income includes the taxable income of its wholly-owned subsidiaries and distribution income related to its ownership of approximately 57% of ESH REIT.
ESH REIT has elected to be taxed and expects to continue to qualify as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). A REIT is a legal entity that holds real estate assets and is generally not subject to federal and state income taxes. In order to maintain qualification as a REIT, ESH REIT is required to distribute at least 90% of its taxable income, excluding net capital gain, to its shareholders each year. In addition, ESH REIT must meet a number of complex organizational and operational requirements. If ESH REIT were to fail to qualify as a REIT in any taxable year, it would be subject to federal income taxes at regular corporate rates and generally would be precluded from qualifying as a REIT for the subsequent four taxable years following the year during which it lost its REIT qualification. ESH REIT intends to distribute its taxable income to the extent necessary to optimize its tax efficiency including, but not limited to, maintaining its REIT status, while retaining sufficient capital for its ongoing needs. Even in qualifying as a REIT, ESH REIT may be subject to state and local taxes in certain jurisdictions, and is subject to federal income and excise taxes on undistributed income.    
The Company recorded a provision for federal, state and foreign income taxes of approximately $15.0 million for the three months ended September 30, 2018, an effective rate of approximately 16.6%, as compared with a provision of approximately $20.3 million for the three months ended September 30, 2017, an effective rate of approximately 23.5%. The Company recorded a provision for federal, state and foreign income taxes of approximately $35.2 million for the nine months ended September 30, 2018, an effective tax rate of approximately 17.0%, as compared with a provision of approximately $40.7 million for the nine months ended September 30, 2017, an effective rate of approximately 23.6%. The Company’s effective rate differs from the federal statutory rate of 21% primarily due to ESH REIT’s status as a REIT under the provisions of the Code. During the nine months ended September 30, 2017, the Company was subject to a federal statutory income tax rate of 35%. Due to the TCJA, the Company's federal income tax rate decreased to 21%, effective January 1, 2018.
As of September 30, 2018, the Company has not completed its accounting for all tax effects related to the enactment of the TCJA. The Company estimated the remeasurement of its net deferred tax asset based on the 21% federal corporate income tax rate and recorded provisional deferred income tax expense of approximately $4.1 million during the fourth quarter of 2017. The Company is still analyzing the TCJA and refining its calculations, including the TCJA’s effect on state income taxes, the transition rules applicable to the deductibility of certain types of expenses and certain other matters, all of which are subject to complex rules and continued interpretation. The Company expects to complete its analysis prior to filing its 2017 federal tax return, which will occur during the prescribed measurement period. At that time, which is expected to occur in the fourth quarter of 2018, the Company will conclude on further adjustments, if any, to be recorded in addition to the approximately $4.1 million provisional expense recorded during the fourth quarter of 2017.  
The Company’s income tax returns for the years 2015 to present are subject to examination by the Internal Revenue Service ("IRS") and other tax returns for the years 2013 to present are subject to examination by other taxing authorities. During the three months ended September 30, 2018, Extended Stay America, Inc. was notified by the IRS that it would be subject to an audit for the 2016 tax year. As this audit is still in process, the timing of the resolution and any payments that may be required cannot be determined at this time. The Company believes that, to the extent a liability may exist, it is appropriately reserved.
ESH REIT  
Entity Information [Line Items]  
Income Taxes
INCOME TAXES
ESH REIT has elected to be taxed and expects to continue to qualify as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (“the Code”). A REIT is a legal entity that holds real estate assets and is generally not subject to federal and state income taxes. In order to maintain qualification as a REIT, ESH REIT is required to distribute at least 90% of its taxable income, excluding net capital gain, to its shareholders each year. In addition, ESH REIT must meet a number of complex organizational and operational requirements. If ESH REIT were to fail to qualify as a REIT in any taxable year, it would be subject to federal income taxes at regular corporate rates and generally would be precluded from qualifying as a REIT for the subsequent four taxable years following the year during which it lost its REIT qualification. ESH REIT intends to distribute its taxable income to the extent necessary to optimize its tax efficiency including, but not limited to, maintaining its REIT status, while retaining sufficient capital for its ongoing needs. Even in qualifying as a REIT, ESH REIT may be subject to state and local taxes in certain jurisdictions, and is subject to federal income and excise taxes on undistributed income.
ESH REIT recorded a provision for state and foreign income taxes of approximately $0.1 million for the three months ended September 30, 2018, an effective rate of approximately 0.5%, as compared with a provision of approximately $0.2 million for the three months ended September 30, 2017, an effective rate of approximately 0.7%. ESH REIT recorded a provision for state and foreign income taxes of approximately $0.8 million for the nine months ended September 30, 2018, an effective rate of approximately 1.6%, as compared with a provision of approximately $0.4 million for the nine months ended September 30, 2017, an effective rate of approximately 5.4%. ESH REIT's effective rate differs from the federal statutory income tax rate of 21% primarily due to ESH REIT's status as a REIT under the provisions of the Code. During the three and nine months ended September 30, 2017, ESH REIT's annual effective tax rate included the impact of ESH REIT's income being subject to Canadian income tax.
ESH REIT’s income tax returns for the years 2015 to present are subject to examination by the Internal Revenue Service and other tax returns for the years 2013 to present are subject to examination by other taxing authorities.