Income and other Taxes

3 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income and other Taxes

Income and other Taxes

For the three months ended December 31, 2015, the Company recorded income tax expense from continuing operations of approximately $2,000 and income tax expense within income from discontinued operations of approximately $13,000. Income tax expense is comprised of estimated alternative minimum tax allocated between continuing operations and discontinued operations as prescribed by ASC 740.

For the three months ended December 31, 2014, the Company recorded $1.9 million of income tax benefit from continuing operations losses and $30.2 million of income tax expense within income from discontinued operations. The income tax expense within discontinued operations included estimated alternative minimum tax and other adjustments prescribed by ASC 740 in allocating expected annual income tax expense (benefit) between continuing operations and discontinued operations.

For three months ended December 31, 2015 and 2014, the effective tax rate on continuing operations was 1.5% and 37.9%, respectively. The lower tax rate for the three months ended December 31, 2015 was primarily due to permanent differences, state tax benefits and foreign tax rate differentials. The higher tax rate for the three months ended December 31, 2014 was primarily due to the methodology used for allocating income tax expense between continuing and discontinued operations under ASC 740. The Company uses estimates to forecast the results from continuing operations for the current fiscal year as well as permanent differences between book and tax accounting.

We have not provided for U.S. federal and state income taxes on non-U.S. subsidiaries' undistributed earnings as of December 31, 2015 because we plan to indefinitely reinvest the unremitted earnings of our non-U.S. subsidiaries.

All deferred tax assets will have a full valuation allowance at December 31, 2015 and the Company expects all remaining deferred tax assets to have a full valuation allowance at September 30, 2016. However, on a quarterly basis, the Company will evaluate the positive and negative evidence to assess whether the more likely than not criteria, mandated by ASC 740, has been satisfied in determining whether there will be further adjustments to the valuation allowance.

During the three months ended December 31, 2015 and 2014, there were no material increases or decreases in unrecognized tax benefits. As of December 31, 2015 and September 30, 2015, we had approximately $0.3 million and $0.3 million, respectively, of interest and penalties accrued as tax liabilities on our balance sheet.