Income Tax

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

On August 16, 2022, the Inflation Reduction Act of 2022 (“the Act”) was enacted in the U.S. The Act includes law changes relating to tax, climate change, energy and health care. In particular, for tax years ending after December 31, 2022, the Act imposes a 15% minimum tax on adjusted financial statement income for applicable corporations with average financial statement income over $1 billion for the previous 3-year period ending in 2022 or after. Based on the current guidance, the Company is not an applicable corporation for 2023. The Act also imposes a 1% excise tax on stock buybacks of a publicly traded corporation. The Act is not expected to have a material impact to the Company’s tax expense.

The effective tax rate for the three months ending March 31, 2023, was 28.0% on pre-tax income. The tax rate was higher than the U.S. statutory rate primarily due to income earned in jurisdiction with tax rates greater than the U.S. statutory tax rate, Global Intangible Low-Taxed income (“GILTI”), Subpart F income and adjustments to the valuation allowance. The effective tax rate for the three months ending March 31, 2022, was 26.3%. The tax rate was higher than the U.S. statutory rate primarily as a result of income in jurisdictions with tax rates higher than the U.S. and basis adjustments in foreign jurisdictions. These increases were partially offset with benefits received from tax credits generated during the year.