Income Taxes

9 Months Ended

Jul. 03, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rates for the first nine months of fiscal 2022 and 2021 were 23.9% and 20.4%, respectively. Income tax expense was reduced by $4.9 million and $8.7 million of excess tax benefits on share-based payments in the first nine months of fiscal 2022 and 2021, respectively. Excluding the impact of the excess tax benefits on share-based payments, our effective tax rates in the first nine months of fiscal 2022 and 2021 were 25.9% and 25.0%, respectively.

As of July 3, 2022 and October 3, 2021, the liability for income taxes associated with uncertain tax positions was $11.3 million and $14.1 million, respectively. These uncertain tax positions substantially relate to ongoing examinations. It is reasonably possible that these liabilities may decrease within the next 12 months as certain examinations are resolved. These liabilities represent our current estimates of the additional tax liabilities that we may be assessed when the related audits are concluded. If these audits are resolved in a manner more unfavorable than our current expectations, our additional tax liabilities could be materially higher than the amounts currently recorded resulting in additional tax expense.

On December 28, 2021, the U.S. Department of the Treasury and the Internal Revenue Service released final regulations addressing aspects of the foreign tax credit regime, and represent the third and final regulations that have been issued with respect to the core provisions of the U.S. foreign tax credit regime following the 2017 Tax Cut and Jobs Act. These regulations were primarily effective on March 7, 2022, with certain provisions applicable to prior periods, and they do not materially impact our consolidated financial statements.