Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 3. Income Taxes

During 2020 and 2021, the Internal Revenue Service (IRS) and the U.S. Department of Treasury (Treasury) issued additional guidelines and clarifying regulations related to the implementation of the 2017 Tax Act. It is possible that additional guidance issued by the U.S, IRS and Treasury could be issued in future periods. As this guidance is issued, or as other changes in tax regulations occur in the U.S. or other jurisdictions, the Company will evaluate the information to determine whether any additional adjustments to its tax provisions or disclosures are required.

The 2017 Tax Act included provisions for Global Intangible Low-Taxed Income (GILTI) under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries and for Base Erosion and Anti-Abuse Tax (BEAT) under which taxes are imposed on certain base eroding payments to affiliated foreign companies. The Company treats BEAT and GILTI as components of current income tax expense. For the three and nine months ended September 30, 2022 and 2021, there was no BEAT expense and GILTI expense was insignificant. The Company’s consolidated effective income tax rate was 22.6% and 24.4% for the three and nine months ended September 30, 2022, as compared to 27.0% and 25.7%, respectively, for the same periods in 2021. Both periods in 2022 benefited from U.S. income tax deductions for Foreign-derived intangible income (FDII).