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Income Taxes (Notes)
 12 Months Ended
Sep. 30, 2022
Income Tax Disclosure [Abstract]  
Income taxes INCOME TAXES
At both September 30, 2021 and 2020, Old BellRing held 28.8% of the economic interest in BellRing LLC, and immediately prior to the Spin-off, Old BellRing held 28.5% of the economic interest in BellRing LLC (see Note 1). As a result of the IPO and formation transactions, Old BellRing’s economic interest was treated as a partnership for U.S. federal income tax purposes. As a partnership, BellRing LLC was itself generally not subject to U.S. federal income tax under current U.S. tax laws. Generally, items of taxable income, gain, loss and deduction of BellRing LLC were passed through to its members, Old BellRing and Post. Old BellRing was responsible for its share of taxable income or loss of BellRing LLC allocated to it in accordance with the BellRing LLC Agreement and partnership tax rules and regulations.
Subsequent to the Spin-off, the Company reported 100% of the income, gain, loss and deduction of BellRing LLC for U.S. federal, state and local income tax purposes.
The expense (benefit) for income taxes consisted of the following:
Year Ended September 30,
202220212020
Current:
Federal$28.0 $9.2 $10.7 
State5.2 1.7 2.0 
Foreign0.4 (0.6)(0.2)
33.6 10.3 12.5 
Deferred:
Federal(3.4)(1.3)(2.0)
State(0.6)(0.2)(1.3)
Foreign— — — 
(4.0)(1.5)(3.3)
Income tax expense$29.6 $8.8 $9.2 
The effective income tax rate for fiscal 2022 was 20.3% compared to 7.1% for fiscal 2021 and 8.4% for fiscal 2020. The increase in the effective income tax rate compared to each of the prior years was primarily due to the change in tax expense allocation related to the Spin-off. After the Spin-off, the Company reported 100% of the income, gain, loss and deduction of BellRing LLC for U.S. federal, state, and local income tax purposes, whereas in fiscal year 2021 and 2020, the Company reported 28.8% of such activity.
The following table presents the reconciliation of income tax expense with amounts computed at the federal statutory tax rate.
Year Ended September 30,
202220212020
Computed tax (21%)$30.6 $25.9 $23.0 
Income tax expense attributable to NCI(7.6)(19.5)(16.2)
State income taxes, net of effect on federal tax4.7 4.0 3.0 
Transaction costs2.0 — (1.2)
Uncertain tax position— — 1.5 
Other, net (none in excess of 5% of computed tax)(0.1)(1.6)(0.9)
Income tax expense$29.6 $8.8 $9.2 
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax non-current assets (liabilities) were as follows:
September 30, 2022September 30, 2021
AssetsLiabilitiesNetAssetsLiabilitiesNet
Stock-based compensation awards$1.6 $— $1.6 $0.1 $— $0.1 
Accrued vacation, incentive and severance2.6 — 2.6 — — — 
Inventory4.1 — 4.1 — — — 
Accrued liabilities4.7 — 4.7 2.5 — 2.5 
ROU assets— (1.7)(1.7)— — — 
Lease liabilities1.7 — 1.7 — — — 
Property— (0.4)(0.4)— — — 
Intangible assets— (14.8)(14.8)1.0 — 1.0 
Investment in partnership (a)— — — — (11.2)(11.2)
Deferred income taxes$14.7 $(16.9)$(2.2)$3.6 $(11.2)$(7.6)
(a)Prior to the Spin-off, Old BellRing held an economic interest in BellRing LLC which, as a result of the IPO and formation transactions, was treated as a partnership for U.S. federal income tax purposes. As a partnership, BellRing LLC itself was generally not subject to U.S. federal income tax under current U.S. tax laws. Generally, items of taxable income, gain, loss and deduction of BellRing LLC were passed through to its members, Old BellRing and Post. Old BellRing was responsible for its share of taxable income or loss of BellRing LLC allocated to it in accordance with the BellRing LLC Agreement and partnership tax rules and regulations. Subsequent to the Spin-off, the Company reported 100% of the income, gain, loss and deduction of BellRing LLC for U.S. federal, state, and local income tax purposes.
No provision has been made for income taxes on undistributed earnings of consolidated foreign subsidiaries of $1.7 and $1.0 at September 30, 2022 and 2021, respectively, as it is the Company’s intention to indefinitely reinvest undistributed earnings of its foreign subsidiaries. It is not practicable to estimate the additional income taxes and applicable foreign withholdings that would be payable on the remittance of such undistributed earnings.
For fiscal 2022, 2021 and 2020, foreign income (loss) before income taxes was $1.1, $(1.9) and $(0.8), respectively.
Unrecognized Tax Benefits
The Company recognizes the tax benefit from uncertain tax positions only if it is “more likely than not” that the tax position will be sustained on examination by the taxing authorities. The tax benefits recognized from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. To the extent the Company’s assessment of such tax positions changes, the change in estimate will be recorded in the period in which the determination is made.
Unrecognized tax benefits activity for the years ended September 30, 2022, 2021 and 2020 is presented in the following table:
Year Ended September 30,
202220212020
Balance, beginning of year$1.5 $1.5 $— 
Additions for tax positions taken in current year— — 1.5 
Balance, end of year$1.5 $1.5 $1.5 
The amount of the net unrecognized tax benefits that, if recognized, would directly affect the effective tax rate was $1.5 at September 30, 2022. None of the unrecognized tax benefits at September 30, 2022 are expected to be recognized within the next twelve months.
The Company computes tax-related interest and penalties as the difference between the tax position recognized for financial reporting purposes and the amount previously taken on the Company’s tax returns and classifies these amounts as components of income tax (benefit) expense. During each of the years ended September 30, 2022, 2021 and 2020, expenses recorded related to interest and penalties were immaterial, and the Company had immaterial interest and penalty accruals at both September 30, 2022 and 2021.
U.S. federal, U.S. state and German income tax returns for the tax years ended September 30, 2019 through September 30, 2021 are generally open and subject to examination by the tax authorities in each respective jurisdiction.