Income Taxes

6 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

NOTE I – INCOME TAXES

Current fiscal year

Ashland’s effective tax rate in any interim period is subject to adjustments related to discrete items and the mix of domestic and foreign operating results. The overall effective tax rate was a benefit of 612% and 610% for the three and six months ended March 31, 2024.

The current quarter's tax rate was impacted by jurisdictional income mix, as well as a net $102 million from favorable tax discrete items primarily related to changes in foreign tax activity. The current six month tax rate was impacted by jurisdictional income mix, as well as net $126 million from favorable tax discrete items primarily related to changes in foreign tax activity.

Prior fiscal year

The overall effective tax rate was a benefit of 1% and 5% for the three and six months ended March 31, 2023. The quarter tax rate was impacted by jurisdictional income mix, as well as net $20 million from favorable tax discrete items primarily related to changes in uncertain tax positions. The six months tax rate was impacted by jurisdictional income mix, as well as net $23 million from favorable tax discrete items primarily related to changes in uncertain tax positions resulting primarily from a combination of state expirations and audit settlements.

Unrecognized tax benefits

Changes in unrecognized tax benefits are summarized as follows for the six months ended March 31, 2024.

(In millions)
Balance at October 1, 2023	$	59
Increases related to positions taken in prior years		2
Decreases related to positions taken in prior years		(1	)
Increases related to positions taken in current year		3
Lapse of statute of limitations		(1	)
Balance at March 31, 2024	$	62

From a combination of statute expirations and audit settlements in the next twelve months, Ashland expects a decrease in the amount of accrual for uncertain tax positions of between $4 million and $5 million for continuing operations. For the remaining balance as of March 31, 2024, it is reasonably possible that there could be material changes to the amount of uncertain tax positions due to activities of the taxing authorities, settlement of audit issues, reassessment of existing uncertain tax positions or the expiration of applicable statute of limitations; however, Ashland is not able to estimate the impact of these items at this time.