Income Taxes

9 Months Ended

Sep. 30, 2022

Income Taxes

11.Income Taxes

For the three and nine months ended September 30, 2022, the Company recorded an income tax provision of $7.1 million and $28.9 million, respectively. The Company’s effective tax rate for the three and nine months ended September 30, 2022 was 14.9% and 17.4%, respectively, compared to 18.8% and 16.4% for the corresponding periods in the prior year. The difference in effective tax rates between the periods was primarily due to higher income before income taxes, benefits from foreign-derived intangible income, business tax credits and lower windfall benefits recognized on stock option exercises and the vesting of stock units. The effective tax rates for the three and nine months ended September 30, 2022 and 2021 were lower than the U.S. statutory rate of 21% primarily due to business tax credits, benefits from foreign-derived intangible income and windfall benefits on stock option exercises and the vesting of stock units.

On August 16, 2022, the United States enacted the Inflation Reduction Act of 2022 ("Inflation Reduction Act"), which, among other things, implements a 15% alternative minimum tax on global adjusted financial statement income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy and will become effective beginning in 2023. We evaluated the provisions of the Inflation Reduction Act and as of September 30, 2022, we believe that no provision had a material effect on our consolidation financial position or results of operations.