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Income Taxes
6 Months Ended
Sep. 30, 2020
Income Taxes [Abstract]  
Income Taxes
Note 8: Income Taxes

The Company’s effective tax rate for the three months ended September 30, 2020  and 2019 was 61.0 percent and (336.4) percent, respectively. The Company’s effective tax rate for the six months ended September 30, 2020 and 2019 was 96.5 percent and 66.0 percent, respectively. The effective tax rates for the fiscal 2021 periods were negatively impacted by an income tax charge related to a valuation allowance on deferred tax assets in the U.S., as further described below, and favorably impacted by the global intangible low taxed income (“GILTI”) provision of the Tax Cuts and Jobs Act, as finalized regulations were enacted in the second quarter. In the fiscal 2020 periods, the effective tax rates were favorably impacted by the release of an unrecognized tax benefit.

During the second quarter of fiscal 2021, the Company recorded an income tax charge of $6.6 million to increase its valuation allowance on certain U.S. deferred tax assets after determining it was more likely than not the deferred tax assets would not be realized based upon finalized foreign tax credit regulations enacted during the quarter. As of September 30, 2020, valuation allowances against deferred tax assets in certain foreign jurisdictions and the U.S. totaled $30.9 million and $22.0 million, respectively. The Company will maintain the valuation allowances in each applicable tax jurisdiction until it determines it is more likely than not the deferred tax assets will be realized, thereby eliminating the need for a valuation allowance. As further discussed in Note 17, the COVID-19 pandemic has resulted in risks and uncertainties to our business. Future events or circumstances, such as lower taxable income or unfavorable changes in the financial outlook of the Company’s operations in the U.S. and certain foreign jurisdictions, could necessitate the establishment of further valuation allowances, which could have a material adverse effect on the Company’s results of operations and financial condition.

Accounting policies for interim reporting require the Company to adjust its effective tax rate each quarter to be consistent with its estimated annual effective tax rate. Under this methodology, the Company applies its estimated annual income tax rate to its year-to-date ordinary earnings to derive its income tax provision each quarter. The Company records the tax impacts of certain significant, unusual or infrequently occurring items in the period in which they occur. The Company excluded the impact of its operations in certain foreign locations from the overall effective tax rate methodology and recorded them discretely based upon year-to-date results because the Company anticipates net operating losses for the full fiscal year in these jurisdictions. The Company does not anticipate a significant change in unrecognized tax benefits during the remainder of fiscal 2021.