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Income Taxes
9 Months Ended
Dec. 31, 2015
Income Tax Disclosure [Abstract]  
Income Taxes

Note 9 — Income Taxes

The Company currently estimates its annual effective income tax rate to be approximately 10.3% for fiscal year 2016. The estimated effective tax rate is different from the expected statutory rate primarily due to federal research and development tax credits recorded as a result of the Protecting Americans from Tax Hikes (PATH) Act of 2015 enacted on December 18, 2015, which extended the research and development credit permanently, retroactive to January 2015. In the first two quarters of fiscal year 2016, the Company’s estimated annual effective income tax rate did not include the effect of the extension of the research and development tax credit, which resulted in an adjustment of approximately $4.3 million in tax benefits in the third quarter of fiscal year 2016. Also as a result of the extension of the research and development tax credit, approximately $2.1 million of research and development credit generated in the fourth quarter of fiscal year 2015 was recognized as a discrete tax benefit in the third quarter of fiscal year 2016.

Future realization of existing deferred tax assets ultimately depends on future profitability and the existence of sufficient taxable income of appropriate character (for example, ordinary income versus capital gains) within the carryforward period available under tax law. In the event that the Company’s estimate of taxable income is less than that required to utilize the full amount of any deferred tax asset, a valuation allowance is established which would cause a decrease to income in the period such determination is made.

For the three and nine months ended December 31, 2015, the Company’s gross unrecognized tax benefits increased by $1.2 million and $1.9 million, respectively. In the next twelve months it is reasonably possible that the amount of unrecognized tax benefits will not change significantly.