Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesThe gross liability for unrecognized tax benefits at September 30, 2021 and December 31, 2020 was $16,721 and $15,911, respectively, exclusive of interest and penalties, of which $16,532 and $15,761 would affect the effective tax rate if the Company were to recognize the tax benefit.

The Company classifies interest and penalties on unrecognized tax benefits as income tax expense. As of September 30, 2021 and December 31, 2020, the combined amount of accrued interest and penalties related to tax positions taken on tax returns was $1,835 and $2,105, respectively.

	September 30, 2021		December 31, 2020
Gross liability for unrecognized tax benefits, exclusive of interest and penalties	$	16,721	$	15,911
Interest and penalties on unrecognized benefits	1,835		2,105
Total gross uncertain tax positions	$	18,556	$	18,016
Amount included in Current liabilities	$	4,497	$	6,546
Amount included in Other long-term liabilities	14,059		11,470
	$	18,556	$	18,016

The effective income tax rate for the three and nine months ended September 30, 2021 and 2020 differs from the federal income tax statutory rate due to the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Statutory rate	21.0	%	21.0	%	21.0	%	21.0	%
State taxes, net of federal tax benefit	2.5		3.3		3.0		3.2
Foreign tax expense and tax rate differential	(0.1)		(0.2)		(0.1)		(0.1)
Tax benefit from stock option exercises	(0.6)		(0.4)		(1.0)		(1.0)
Expiration of the statute of limitations	—		(1.3)		—		(0.5)
State settlements	(0.3)		—		(0.2)		—
Provision-to-return adjustment	(0.5)		(0.4)		(0.2)		(0.1)
Other, net	(0.3)		(0.6)		(0.3)		(0.5)
	21.7	%	21.4	%	22.2	%	22.0	%

The Company files income tax returns in the United States on a consolidated basis and in many U.S. state and foreign jurisdictions. The Company is subject to examination of income tax returns by the Internal Revenue Service (IRS) and other domestic and foreign tax authorities. The Company is no longer subject to U.S. federal income tax examination for years before 2017 and is no longer subject to state, local or foreign income tax examinations by authorities for years before 2015.

The Company estimates it will recognize $4,497 of gross unrecognized tax benefits. This amount is expected to be paid within one year or to be removed at the expiration of the statute of limitations and resolution of income tax audits and is netted against the current payable account. These unrecognized tax benefits are related to tax positions taken on certain federal, state, and foreign tax returns. However, the timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. While it is reasonably possible that some issues under examination could be resolved in the next twelve months, based upon the current facts and circumstances, the Company cannot reasonably estimate the timing of such resolution or the total range of potential changes as it relates to the current unrecognized tax benefits that are recorded as part of the Company’s financial statements.