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Income Taxes
9 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
Income Taxes

10.

Income Taxes

The effective tax rates for the three and nine months ended September 30, 2017 were 30.5% and 26.6%, respectively. The effective tax rates for the three and nine months ended October 1, 2016 were 10.3% and 18.6%, respectively.

For the nine months ended September 30, 2017, the primary difference between the US federal statutory tax rate and the Company’s consolidated effective tax rate was due to the $11,633 tax benefit related to the cessation of operations of the Company’s Spanish subsidiary recorded in the first quarter of fiscal 2017 and a $2,255 reversal of tax reserves resulting from an updated transfer pricing study.

For the three months and nine months ended October 1, 2016 the primary differences between the US federal statutory tax rate and the Company’s consolidated effective tax rate were due to $11,438 net tax benefits arising from a research and development tax credit and a Section 199 deduction for the tax years 2012 through 2016, partially offset by $2,684 of income tax expenses recorded for out-of-period adjustments. See Note 1 for additional information on these adjustments. For the nine months ended October 1, 2016, the difference between the US federal statutory tax rate and the Company’s consolidated effective tax rate was also due to the reversal of a $2,500 valuation allowance related to tax benefits for foreign losses that are now expected to be realized.

The differences between the US federal statutory tax rate and the Company’s consolidated effective tax rate is as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

October 1,

 

 

September 30,

 

 

October 1,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

US federal statutory tax rate

 

 

35.0

%

 

 

35.0

%

 

 

35.0

%

 

 

35.0

%

State income taxes (net of federal benefit)

 

 

0.5

%

 

 

0.0

%

 

 

1.5

%

 

 

0.0

%

Cessation of Spanish operations

 

 

0.0

%

 

 

0.0

%

 

 

(8.5

%)

 

 

0.0

%

Research and development credit

 

 

(2.1

%)

 

 

(39.6

%)

 

 

(2.2

%)

 

 

(24.0

%)

Tax (windfall) shortfall on share-based

   awards

 

 

(0.9

%)

 

 

0.0

%

 

 

0.0

%

 

 

0.0

%

Reserves for uncertain tax positions

 

 

(4.5

%)

 

 

7.4

%

 

 

(1.7

%)

 

 

5.2

%

Out-of-period adjustments

 

 

0.0

%

 

 

7.0

%

 

 

0.0

%

 

 

4.0

%

Increase (decrease) in valuation allowance

 

 

1.1

%

 

 

0.0

%

 

 

3.0

%

 

 

(3.8

%)

Other

 

 

1.4

%

 

 

0.5

%

 

 

(0.5

%)

 

 

2.2

%

Effective Tax Rate

 

 

30.5

%

 

 

10.3

%

 

 

26.6

%

 

 

18.6

%