Income Taxes

9 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

U.S. Tax Cuts and Jobs Act

The United States enacted the U.S. Tax Cuts and Jobs Act (the "Tax Act") on 22 December 2017. This legislation significantly changed existing U.S. tax laws, including a reduction in the federal corporate income tax rate from 35% to 21%, a deemed repatriation tax on unremitted foreign earnings, as well as other changes.

We filed our 2018 federal income tax return in June 2019, which required an adjustment to our initial calculation of the deemed repatriation tax. Our income tax provision for the three months ended 30 June 2019 includes a discrete net income tax expense of $3.2 resulting from this adjustment. Our income tax provision for the nine months ended 30 June 2019 includes a net expense of $43.8, which reflects the net expense recorded to refine our estimates in the first quarter of 2019, within the one-year measurement period. This net expense included the reversal of a $56.2 benefit recorded in the fourth quarter of fiscal year 2018 related to the U.S. taxation of deemed foreign dividends and a benefit of $12.4 to reduce the total expected costs of the deemed repatriation tax.

For the nine months ended 30 June 2018, our consolidated income statements reflect the impacts recorded during the first quarter of fiscal year 2018, which include a discrete net income tax expense of $206.5 for our initial provisional estimates of the impacts of the Tax Act and a reduction to equity affiliates' income of $32.5 for future costs of repatriation related to the Tax Act that will be borne by an equity affiliate.

While our accounting for the provisions of the Tax Act is not provisional, further adjustments to the deemed repatriation tax could result from future adjustments to state tax return filing positions, U.S. or foreign tax examinations of the years impacted by the calculation, or from the issuance of additional federal or state guidance.

2018 Tax Restructuring and Audit Settlement

In the second quarter of fiscal year 2018, we recognized a $38.8 tax benefit, net of reserves for uncertain tax positions, and a decrease in net deferred tax liabilities resulting from the restructuring of foreign subsidiaries.

In the third quarter of fiscal year 2018 we received a final audit settlement agreement that resulted in an income tax benefit of approximately $9.1, including interest, in continuing operations during the three months ended 30 June 2018 for the release of tax reserves.

Effective Tax Rate

Our effective tax rate was 17.9% and 21.3% for the three and nine months ended 30 June 2019, respectively. Our effective tax rate was 19.4% and 30.6% for the three and nine months ended 30 June 2018, respectively. The current and prior year effective tax rates were primarily impacted by the Tax Act, restructuring benefit, and audit settlement items discussed above.

Cash Paid for Taxes (Net of Cash Refunds)

On a total company basis, income tax payments, net of refunds, were $250.8 and $319.1 for the nine months ended 30 June 2019 and 2018, respectively.