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Income Taxes
9 Months Ended
Sep. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company's effective tax rate for the third quarter of 2021 was 31.5% which differs from the U.S. federal statutory rate of 21% primarily due to state income taxes, U.S. tax on foreign dividends, nondeductible transaction costs associated with the Bacharach acquisition and nondeductible executive compensation, partially offset by tax benefits on certain share-based payments. The Company's effective tax rate for the third quarter of 2020 was 29.3%, which differs from the U.S. statutory rate of 21% primarily due to state income taxes, increased profitability in less favorable tax jurisdictions, higher foreign entity losses in jurisdictions where we cannot take tax benefits, increased statutory rates in foreign jurisdictions, nondeductible executive compensation, and U.S. tax on foreign dividends.
On June 10, 2021 the United Kingdom Parliament announced royal assent for Bill No. 12, on the Finance Act of 2021. This bill will increase the statutory rate from 19% to 25% in April 2023. The Company recorded this impact on its deferred tax balances in the second quarter of 2021.
The Company's effective tax rate for the nine months ended September 30, 2021 was 25.8% which differs from the U.S. federal statutory rate of 21% primarily due to state income taxes, statutory rate increases in foreign jurisdictions, U.S. tax on foreign dividends and nondeductible executive compensation, partially offset by tax benefits on certain share-based payments. The Company's effective tax rate for the nine months ended September 30, 2020 was 25.1% which differs from the U.S. statutory rate of 21% due to state income taxes, increased profitability in less favorable tax jurisdictions and higher foreign entity losses in jurisdictions where we cannot take tax benefits, increased statutory rates in foreign jurisdictions, partially offset by tax benefits on certain share-based payments.
At September 30, 2021, the Company had a gross liability for unrecognized tax benefits of $8.8 million. The Company has recognized tax benefits associated with these liabilities of $2.7 million at September 30, 2021. The gross liability includes amounts associated with foreign tax exposure in prior periods.
The Company recognizes interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company's liability for accrued interest related to uncertain tax positions was $1.3 million at September 30, 2021.
We are subject to regular review and audit by both foreign and domestic tax authorities. While we believe our tax positions will be sustained, the final outcome of tax audits and related litigation may differ materially from the tax amounts recorded in our unaudited condensed consolidated financial statements.