INCOME TAXES

9 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

As of December 31, 2019 and March 31, 2019, the Company had $5.1 million and $5.8 million, respectively, of total gross unrecognized tax benefits including interest.  Approximately $4.7 million and $5.4 million, respectively, represent the amount of net unrecognized tax benefits that are permanent in nature and, if recognized, would affect the annual effective tax rate. At December 31, 2019, approximately $1.0 million of gross unrecognized tax benefits are expected to be resolved during the next twelve months through the expiration of the statute of limitations and settlement with taxing authorities. The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax expense.  As of December 31, 2019, the Company had approximately $1.8 million accrued for gross interest, of which $0.7 thousand was accrued during the nine months ended December 31, 2019.

The Company is subject to U.S. income taxes, as well as various other state and local jurisdictions.  With the exception of a few states, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities

for years before 2016, although carryforward attributes that were generated prior to 2016 may still be adjusted upon examination by the taxing authorities if they either have been or will be used in a future period.  

The Company’s effective income tax rate for continuing operations totaled (8.0)% for the quarter ended December 31, 2019 compared to 11.8% for the prior year quarter. The difference is primarily due to the recognition of the $8 million non-deductible accrual for the potential Mexico resolution and an increase in disallowed executive compensation under IRC Section 162(m) which was partially offset by tax credits under the Federal Historic Tax Credit program and a reduction in the permanent difference related to non-qualified stock option expense in the current quarter.