Income Tax Provision

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Tax Provision

NOTE 5 – Income Tax Provision

The table below sets forth information related to our income tax expense:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Domestic pre-tax income	$	18,577		$	7,707		$	25,645		$	12,975
Foreign pre-tax income	$	52,169		$	18,351		$	95,088		$	38,039
Income tax provision	$	12,120		$	4,670		$	21,554		$	9,226
Effective tax rate		17.1	%		17.9	%		17.9	%		18.1	%
Impact of tax holidays on tax expense	$	(679	)	$	(241	)	$	(1,261	)	$	(1,315	)
Earnings per share impact of tax holidays:
Basic	$	0.02		$	0.01		$	0.03		$	0.03
Diluted	$	0.02		$	0.01		$	0.03		$	0.03

The decrease in the effective tax rate for the three and six months ended June 30, 2021 when compared to the three and six months ended June 30, 2020, is primarily attributable to the change in pre-tax earnings during the comparable periods.  

Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to earnings of certain European and Asian subsidiaries.  Any future distributions of foreign earnings will not be subject to additional U.S. income tax, but may be subject to non-U.S. withholding taxes.

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations by tax authorities for tax years before 2012, or for the 2015 tax year. We are no longer subject to China income tax examinations by tax authorities for tax years before 2010. With respect to state and local jurisdictions and countries outside of the U.S. (other than China), with limited exceptions, the Company is no longer subject to income tax audits for years before 2015. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties, if any, have been provided for in the Company’s reserve for any adjustments that may result from currently pending tax audits. The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits in interest expense. As of June 30, 2021, the gross amount of unrecognized tax benefits was approximately $45.9 million.   

It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company’s unrecognized tax positions will significantly increase or decrease within the next 12 months. At this time, an estimate of the range of the reasonably possible outcomes cannot be made.