Income Taxes

6 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Effective Tax Rate

Our effective tax rate was 21.2% and 19.9% for the three and six months ended 31 March 2023, respectively, and 18.6% and 17.8% for the three and six months ended 31 March 2022, respectively.

During the second quarter of 2023, we recognized a charge of $185.6 ($153.7 attributable to Air Products after tax) related to various business and asset actions. Refer to Note 4, Business and Asset Actions, for additional information. This charge included certain losses for which we could not recognize an income tax benefit. Therefore, we recorded a valuation allowance of $31.7 against deferred tax assets resulting from the charge. Partially offsetting the valuation allowance cost was a $15.9 income tax benefit from a tax election related to a non-U.S. subsidiary.

Cash Paid for Taxes (Net of Cash Refunds)

Income tax payments, net of refunds, were $327.0 and $236.9 for the six months ended 31 March 2023 and 2022, respectively.