Income and Other Taxes

9 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income and Other Taxes

Income and Other Taxes

During the three and nine months ended June 30, 2023, the Company recorded an income tax expense of $29 thousand and $177 thousand, respectively, composed primarily of state tax expense and tax expense generated from the tax amortization on acquired indefinitely lived assets. For the three and nine months ended June 30, 2023 the effective tax rate on continuing operations was 0.3% and 0.5%, respectively.

During the three and nine months ended June 30, 2022, the Company recorded an income tax expense of $27 thousand and $25 thousand, respectively, composed primarily of Texas gross margin taxes. For the three and nine months ended June 30, 2022 the effective tax rate on continuing operations was 0.4% and 0.3%, respectively.

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 income taxes on non-U.S. subsidiaries’ undistributed earnings as of June 30, 2023 because we plan to indefinitely reinvest the unremitted earnings of our non-U.S. subsidiaries and all of our non-U.S. subsidiaries historically have negative earnings and profits.

All deferred tax assets have a full valuation allowance as of June 30, 2023, except for the tax amortization of indefinitely lived goodwill, which cannot be utilized to reduce deferred tax assets. On a quarterly basis, the Company evaluates the positive and negative evidence to assess whether the more-likely-than-not criteria has been satisfied in determining whether there will be further adjustments to the valuation allowance.

As of June 30, 2023 and September 30, 2022, we did not accrue any significant uncertain tax benefit, interest, or penalties as tax liabilities on our condensed consolidated balance sheets. During the three and nine months ended June 30, 2023, there were no material increases or decreases in unrecognized tax benefits.