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Income Taxes
3 Months Ended
Dec. 30, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
INCOME TAXES
The income tax benefit for the three months ended December 30, 2017 included certain discrete benefits of $25,378 for the estimated impact of the Tax Cuts and Jobs Act (the Tax Act) enacted into law on December 22, 2017. The discrete benefits primarily related to $32,264 of estimated benefit from the remeasurement of our estimated net deferred tax liabilities, partially offset by $6,886 of estimated expense associated with the mandatory deemed repatriation tax. Excluding the impact of these discrete benefits, the effective tax rate for the three months ended December 30, 2017 decreased compared to the prior year primarily due to the lower U.S. corporate tax rate under the Tax Act.
The SEC issued Staff Accounting Bulletin No. 118 (SAB 118) which allows registrants to record provisional amounts during a one-year measurement period. SAB 118 summarizes a three-step process to be applied at each reporting period to account for and qualitatively disclose: (i) the effects of the change in tax law for which accounting is complete; (ii) provisional amounts (or adjustments to provisional amounts) for the effects of the tax law where accounting is not complete, but that a reasonable estimate has been determined; and (iii) a reasonable estimate cannot yet be made and therefore taxes are reflected in accordance with law prior to the enactment of the Tax Act.
Amounts recorded where the accounting is complete during the three months ended December 30, 2017 primarily relate to the reduction in the U.S. corporate income tax rate to 21%, and we recorded an income tax benefit of $32,244 to remeasure deferred tax liabilities associated with intangible assets that will reverse at the new 21% rate.
Amounts recorded where the accounting is provisional during the three months ended December 30, 2017 include the remeasurement of other deferred taxes where the timing of the reversal cannot be known at this time. We have performed a provisional estimate of the net impact of remeasurement of other deferred tax assets and liabilities and recorded a $20 income tax benefit during the three months ended December 30, 2017. In addition, the Tax Act includes a one-time mandatory repatriation transition tax on the net accumulated earnings and profits of our foreign subsidiaries. We have performed a provisional estimate of this tax and recorded a $6,886 income tax provision during the three months ended December 30, 2017. These amounts are provisional based on incomplete information and use of estimates at future balance sheet dates which are needed to finalize the calculation.
We analyzed the Tax Act for all tax provisions expected to be effective in fiscal year 2018, and there are no anticipated effects of the Tax Act where we have not yet recorded a reasonable estimate of the accounting effect as of December 30, 2017.
The full-year estimated annual effective tax rate, which excludes the impact of discrete items, was 17.3% as of December 30, 2017, as compared to 21.8% as of December 31, 2016. This decrease is primarily due to the reduction of the U.S. federal statutory rate from 35.0% to 24.5%, a blended rate based upon our fiscal year, partially offset by higher income before taxes.
As of December 30, 2017, the liability for unrecognized tax benefits was $6,771, of which $4,173 would favorably affect our effective tax rate, if recognized. As of September 30, 2017, the liability for unrecognized tax benefits was $5,849, of which $3,234 would favorably affect our effective tax rate, if recognized. As of December 30, 2017, we do not expect significant changes in the amount of unrecognized tax benefits during the next twelve months.