Income Taxes

6 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes

In accordance with ASC 740, Income Taxes, the Company makes its best estimate of the annual effective tax rate at the end of each interim period, and the impact of discrete items, if any, and adjusts the rate as necessary. As of March 31, 2022, the Company applied its estimated annual effective tax rate of (47.6)%, including the impact of discrete items, to its loss before taxes of $89.0 million for the six months ended March 31, 2022, resulting in income tax expense of $67.2 million and $36.8 million for the three and six months ended March 31, 2022, respectively. This resulted in effective tax rates of 422.5% and (41.4)% for the three and six months ended March 31, 2022, respectively, as compared to the federal statutory rate of 21.0%.

As a result of the seasonality of the sales of the Company's products, the Income (loss) before taxes for the six months ended March 31, 2022 is lower than the projected Income (loss) before taxes for the fiscal year ended September 30, 2022, resulting in the recorded income tax expense. The effective tax rate was different than the statutory rate primarily due to the unfavorable adjustments for noncontrolling interest for Weber Inc.'s allocable share of Weber HoldCo LLC's net loss and its branch income.

The Company recorded income tax expense of $15.2 million and $15.4 million for the three and six months ended March 31, 2021, respectively, resulting in effective tax rates of 19.7% and 18.4%, respectively, as compared to the federal statutory rate of 21.0%. The difference in the rate was due to nontaxable U.S. flow-through income and a discrete benefit resulting from our United Kingdom and South Africa valuation allowance releases. This benefit was partially offset by foreign taxes owed by foreign subsidiaries