	Three Months Ended June 30						Nine Months Ended June 30
	2021			2020			2021			2020
	(Dollars in millions)
(Provision) benefit for income taxes	$	(30	)	$	5		$	(93	)	$	(9	)
Effective tax rate		24	%		51	%		27	%		17	%

For the three and nine months ended June 30, 2021, the (Provision) benefit for income taxes included a net discrete tax expense of $1 million and $2 million, respectively. For the three and nine months ended June 30, 2020, the (Provision) benefit for income taxes included a net discrete tax benefit of $2 million and $14 million, respectively. The $14 million benefit was comprised of $8 million related to changes in uncertain tax positions and $6 million related to the impact of tax reform legislation in a foreign jurisdiction.

The Company records its tax provision or benefit on an interim basis using an estimated annual effective tax rate. This rate is applied to the current period ordinary income or loss to determine the income tax provision or benefit allocated to the interim period. The income tax effects of unusual or infrequent items are excluded from the estimated annual effective tax rate and are recognized in the impacted interim period. Losses from jurisdictions for which no benefit can be recognized are excluded from the overall computations of the estimated annual effective tax rate and a separate estimated annual effective tax rate is computed and applied to ordinary income or loss in the loss jurisdiction.

Valuation allowances are provided against the future tax benefits that arise from the deferred tax assets in jurisdictions for which no benefit can be recognized. The estimated annual effective tax rate may be significantly impacted by nondeductible expenses and the Company’s projected earnings mix by tax jurisdiction. Adjustments to the estimated annual effective income tax rate are recognized in the period when such estimates are revised.

Cabot and certain subsidiaries are under audit in a number of jurisdictions. In addition, certain statutes of limitations are scheduled to expire in the near future. It is reasonably possible that a change in the unrecognized tax benefits may also occur within the next twelve months related to the settlement of one or more of these audits or the lapse of applicable statutes of limitations. However, an estimated range of the impact on the unrecognized tax benefits cannot be quantified at this time.

Cabot files U.S. federal and state and non-U.S. income tax returns in jurisdictions with varying statutes of limitations. The 2017 through 2019 tax years generally remain subject to examination by the IRS and various tax years from 2005 through 2019 remain subject to examination by the respective state tax authorities. In significant non-U.S. jurisdictions, various tax years from 2003 through 2020 remain subject to examination by their respective tax authorities.

During the three and nine months ended June 30, 2021, Cabot released uncertain tax positions of a nil amount and $1 million, respectively, due to the expiration of statutes of limitations in various jurisdictions. During the three and nine months ended June 30, 2020, Cabot released uncertain tax positions of $3 million and $11 million, respectively, due to audit settlements and the expiration of statutes of limitations in various jurisdictions.