Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company's effective tax rate for the third quarter of 2022 was 26.0%, which differs from the United States of America ("U.S.") federal statutory rate of 21% primarily due to state income taxes and nondeductible foreign exchange on entity closures. 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, and nondeductible transaction costs, partially offset by tax benefits on certain share-based payments.

The Company's effective tax rate for the nine months ended September 30, 2022, was 24.4% which differs from the U.S. federal statutory rate of 21% primarily due to state income taxes and nondeductible foreign exchange on entity closures. The Company's effective tax rate for the nine months ended September 30, 2021, was 26.0%, which differs from the U.S. federal statutory rate of 21% primarily due to statutory rate increases in foreign jurisdictions and nondeductible executive compensation, partially offset by tax benefits on certain share-based payments.

At September 30, 2022, the Company had a gross liability for unrecognized tax benefits of $4.6 million. The Company has recognized tax benefits associated with these liabilities of $2.2 million at September 30, 2022. The gross liability includes amounts associated with foreign tax exposure in prior periods.

The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and operating expenses, respectively. The Company's liability for accrued interest related to uncertain tax positions was $1.0 million at September 30, 2022.

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.