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Income Taxes
3 Months Ended
Dec. 31, 2014
Income Taxes  
Income Taxes

 

7. Income Taxes

        Our provision for income taxes is impacted by a number of factors, including federal taxes, our international tax structure, state tax rates in the jurisdictions where we conduct business, and our ability to utilize state tax credits that expire between 2015 and 2029. Therefore, our overall effective income tax rate could vary.

        The effective income tax rate for the three months ended December 31, 2014 and 2013 was 35.7% and 33.0%, respectively. Our effective tax rate for the three months ended December 31, 2014 is higher than the federal statutory rate generally due to the impact of state and local taxes. Our effective tax rate for the three months ended December 31, 2013 was lower than the federal statutory rate generally due to the timing and mixture (foreign and domestic) of income and the partial reinvestment of foreign earnings in fiscal 2014.

        We accrue interest and penalties related to unrecognized tax benefits in the provision for income taxes. At December 31, 2014, we had accrued $448 and $174 for the potential payment of interest and penalties, respectively. As of December 31, 2014, we were subject to U.S. federal income tax examinations for the tax years 2011 through 2014, and to non-U.S. examinations for tax years 2009 through 2014. In addition, we are generally subject to state and local examinations for fiscal years 2011 through 2014.

        The Company is under an Internal Revenue Service ("IRS") examination for tax years 2011 through 2012. Among other issues, the IRS has questioned the values used by the Company to provide services to an international subsidiary. The Company believes it has appropriately valued such services and intends to continue to support this position as the IRS examination progresses.