Income taxes

6 Months Ended

Jan. 01, 2022

Income taxes

Income taxes

8. Income taxes

The Company’s effective tax rate on its income before taxes was 21.4% in the second quarter of fiscal 2022. During the second quarter of fiscal 2022, there were no individually material items impacting the Company’s effective tax rate.

During the second quarter of fiscal 2021, the Company’s effective tax rate on its income before taxes was 44.3%. During the second quarter of fiscal 2021, the Company’s effective tax rate was unfavorably impacted primarily by increases to valuation allowances, partially offset by the mix of income in lower tax jurisdictions.

For the first six months of fiscal 2022, the Company’s effective tax rate on its income before taxes was 22.2%. The effective tax rate for the first six months of fiscal 2022 was unfavorably impacted primarily by increases to valuation allowances.

During the first six months of fiscal 2021, the Company’s effective tax rate on its income before taxes was 97.5%. The effective tax rate for the first six months of fiscal 2021 was unfavorably impacted primarily by increases to valuation allowances, partially offset by the mix of income in lower tax jurisdictions.

In January 2022, the U.S. Treasury published new regulations impacting foreign tax credit utilization. The Company is still evaluating this new tax regulation and the impact to income tax expense, which could have a significant impact on income expense in the third quarter of fiscal 2022.