We are subject to taxation in the U.S. federal jurisdiction, as well as various U.S. state and foreign jurisdictions. We have identified our U.S. federal tax return as our “major” tax jurisdiction. As of March 31, 2020, we are no longer subject to examination by U.S. federal tax authorities for years prior to 2016, to examination for any U.S. state taxing authority prior to 2014, or to examination for any foreign jurisdictions prior to 2015. All subsequent periods remain open to examination.

Our effective income tax rate increased to 44.4% for the three months ended March 31, 2020, compared to 26.5% for the prior-year period. The increase in the effective tax rate was primarily due to non-deductible costs incurred during the quarter related to our proposed merger with WillScot.

Uncertain tax positions are recognized and measured using a two-step approach. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation process, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

As of March 31, 2020, the Company had $0.5 million of unrecognized tax benefits, all of which would affect the effective tax rate if recognized. A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows:

	2020
	(In thousands)
Beginning balance	$	515
Additions based on tax positions related to prior years		—
Ending balance	$	515

All of the unrecognized tax benefits outstanding at March 31, 2020 are expected to reverse within the next twelve months.

Our policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. Penalties and associated interest costs, if any, are recorded in rental, selling and general expenses in our Condensed Consolidated Statements of Income.