Income Taxes Level 1 (Notes)

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Tax Disclosure

Income Taxes

Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any discrete

items, which are recorded in the period in which they occur. Discrete items include, among others, such events as changes in estimates due to the finalization of tax returns, tax audit settlements, expiration of statutes of limitation, and increases or

decreases in valuation allowances on deferred tax assets. Our effective tax rate was 22.6% and 25.5% for the three months ended June 30, 2021 and 2020, respectively. Our effective tax rate was 24.2% and 24.3% for the six months ended June 30, 2021 and 2020, respectively. The lower effective tax rate for the three months ended June 30, 2021 was primarily due to the higher excess tax benefits recognized on the settlement of employee share-based awards. The effective tax rate for the six months ended June 30, 2021 and 2020 was higher than the federal statutory tax rate of 21% primarily due to state tax expenses, partially offset by excess tax benefits recognized on the settlement of employee share-based awards.

Unrecognized Tax Benefits

As of June 30, 2021, the total amount of our unrecognized tax benefits was $1.4 million and the total amount of our

accrued interest was $0.7 million.

The federal statutes of limitation have expired for all tax years prior to 2017, and we are not currently under audit by the IRS. Various state jurisdictions are auditing years 2013 through 2018. There are currently no federal or provincial audits in Canada; however, years subsequent to 2015 remain open and could be subject to examination. We believe that it is reasonably possible that the recorded amount of gross unrecognized tax benefits may decrease by $1.4 million within the next twelve months as a result of concluding various state tax matters