Income Taxes



	Six months ended June 30,
	2018		2017
	(In millions)
Income tax provision	$	17.2	$	15.2

In the six months ended June 30, 2018, the income tax provision was $17.2 million for an effective tax rate of 26.1%. The Company’s effective tax rate differed from the 21% statutory federal income tax rate primarily due to state income taxes and certain expenditures which are permanently not deductible for tax purposes, partially offset by the impact of R&D credits.

In the six months ended June 30, 2017, the income tax provision was $15.2 million for an effective tax rate of 33.5%. The Company’s effective tax rate differed from the 35% statutory federal income tax rate primarily due to state income taxes and certain expenditures which are permanently not deductible for tax purposes, offset by the impact of R&D credits, tax benefits attributable to the expiration of statute of limitations, and excess tax benefits from the exercise and vesting of stock-based compensation.

See a discussion of the significant increase in the income tax payable balance in Note 5(f).

A valuation allowance is required when it is more-likely-than-not that all or a portion of deferred tax assets may not be realized. Assessing the need for a valuation allowance requires management to evaluate, on a quarterly basis, all available evidence, both positive and negative. As of June 30, 2018, the Company continues to believe that the weight of the positive evidence outweighed the negative evidence regarding the realization of its net deferred tax assets.

In the three months ended June 30, 2018, the Internal Revenue Service notified the Company that its federal income tax return for the fiscal year ended November 30, 2015, was selected for audit. The Company is unable to determine the outcome of the audit at this time.