Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our effective income tax rate (ETR) for the nine months ended September 30, 2022 and 2021 was 23 percent and 20 percent, respectively. Our ETR for the nine months ended September 30, 2022 increased compared to the ETR for the nine months ended September 30, 2021 primarily due to an increase in the valuation allowance in the current period compared to a decrease in the prior period.

We record interest and penalties related to uncertain tax positions as a component of income tax expense. As of September 30, 2022 and December 31, 2021, our total liability for unrecognized tax benefits, including related interest, was approximately $4.7 million and $3.9 million, respectively. The total amount of unrecognized tax benefits relating to our tax positions is subject to change based on future events and it is reasonably possible that the balance could change significantly over the next 12 months. Given the uncertainty of future events, we are unable to reasonably estimate the range of possible adjustments to our unrecognized tax benefits.

On August 16, 2022, the Inflation Reduction Act (IRA) was enacted. The IRA includes a 15% corporate minimum tax and adjustments to certain energy-related tax credits and incentives. We currently do not expect the tax-related provisions of the IRA to have a material impact on our consolidated financial statements, including our annual ETR.