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Income Taxes
6 Months Ended
Jun. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
 
Our three months ended June 30, 2016 income tax benefit of $2.8 million resulted in an effective income tax rate of 28.6%. Our six months ended June 30, 2016 income tax benefit of $5.5 million resulted in an effective income tax rate of 28.4%. We have historically, including for 2015, calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full calendar year to ordinary income or loss for the reporting period. However, we have used a discrete effective tax rate method to calculate income taxes for the three and six months ended June 30, 2016 because we determined that small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, such that the historical method would not provide a reliable estimate for the three and six months ended June 30, 2016. The effective income tax benefit calculated for the three and six months ended June 30, 2016 differs from the federal statutory rate of 35.0%, primarily due to the nondeductible interest associated with the 3Q earn out and foreign tax credit limitations on dividends paid from foreign subsidiaries.

Our three months ended June 30, 2015 income tax benefit of $1.9 million resulted in an effective income tax rate of 22.3%. Our six months ended June 30, 2015 income tax benefit of $2.0 million resulted in an effective income tax rate of 21.8%. Our effective tax rate was derived by estimating pretax income and income tax expense for the year ending December 31, 2015. Excluding the impact of the loss on sale and discrete items related to enacted state and local tax legislation, our effective tax rate for the three and six months ended June 30, 2015 would have been 46.4% and 47.8%, respectively. The effective income tax rate calculated for the three and six months ended June 30, 2015 excluding the impact of the loss on sale and discrete items related to enacted legislation differs from the federal statutory rate of 35.0%, primarily due to the nondeductible interest associated with the 3Q earn out and the addition of state income taxes.

Harte Hanks, or one of our subsidiaries, files income tax returns in the U.S. federal, U.S. state, and foreign jurisdictions. For U.S. state returns, we are no longer subject to tax examinations for tax years prior to 2011. For U.S. federal and foreign returns, we are no longer subject to tax examinations for tax years prior to 2012.

We have elected to classify any interest expense and penalties related to income taxes within income tax expense in our Consolidated Statements of Comprehensive Income (Loss). We did not have a significant amount of interest or penalties accrued at June 30, 2016 or December 31, 2015.