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Income Taxes
9 Months Ended
Sep. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
INCOME TAXES
The Company's effective income tax rates were 34.2% and 34.6% for the three months ended September 30, 2016 and 2015, respectively, and 34.4% and 34.0% for the nine months ended September 30, 2016 and 2015, respectively. The effective income tax rate is based upon estimated income before income taxes for the year, by jurisdiction, and estimated permanent tax adjustments. The effective income tax rate may fluctuate from quarter to quarter for various reasons, including discrete items such as settlement of foreign, Federal and State tax issues.
The Company’s unrecognized tax benefits were $1.0 million and $0.7 million at September 30, 2016 and December 31, 2015, respectively. There were no interest and penalties related to unrecognized tax benefits at September 30, 2016 and December 31, 2015.
The Company expects the unrecognized tax benefits to change over the next twelve months if certain tax matters settle with the applicable taxing jurisdiction during this time frame, or, if the applicable statutes of limitations lapse. The impact of the amount of such changes to previously recorded uncertain tax positions could range from zero to $1.0 million, exclusive of interest and penalties.
The Company and its domestic subsidiaries are subject to audit for U.S. Federal income tax as well as multiple state jurisdictions. U.S. Federal income tax returns are typically subject to examination by the Internal Revenue Service (“IRS”) and have a statute of limitations of three years; therefore, tax filings for 2013 through 2015 are subject to audit. An audit of a subsidiary's filing for 2013 began in the second quarter of 2015 and was settled in the second quarter of 2016 with no assessment.
State income tax returns are generally subject to examination for a period of three to four years after filing of the respective return. The state impact of any Federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. There were three state audits completed with no material adjustments during the nine months ended September 30, 2016. As of September 30, 2016, there were no audits in process and the tax years from 2012 to 2015 are subject to audit.
The Company is also subject to corporate income tax at its subsidiaries located in the United Kingdom, the Netherlands, India, Canada, Ireland, and Puerto Rico. The tax returns for the Company's subsidiaries located in foreign jurisdictions are subject to examination for periods ranging from one to seven years.