Income Taxes

For each interim reporting period, the Company makes an estimate of the effective tax rate it expects to be applicable for the full fiscal year for its continuing operations. This estimated effective rate is used in providing for income taxes on a year-to-date basis. The Company’s effective tax rate through the first three months of fiscal 2014 was 27%, compared to 37% for the same period of fiscal 2013, and differs from the U.S. federal statutory rate due primarily to (i) the impact of U.S. state and local income taxes, (ii) a domestic production activities deduction, (iii) application of tax credits, and (iv) the decrease in the reserve for uncertain tax positions.

The first quarter of fiscal 2014 effective rate reflects a $111 decrease in the reserve for uncertain tax positions, compared to the comparable period in fiscal 2013. Also not reflected in the fiscal 2013 effective tax rate was the value for research credits since the credits had not formally been extended until after the balance sheet date of December 31, 2012.

In September 2013, the Internal Revenue Service issued final regulations governing the income tax treatment of acquisitions, dispositions, and repairs of tangible property. Taxpayers are required to follow the new regulations in taxable years beginning on or after January 1, 2014. Management is currently assessing the impact of the regulations and does not expect they will have a material impact on the Company’s consolidated financial statements.

The income tax provision from continuing operations consists of the following:



	Three Months Ended December 31,
	2013		2012
Current income tax provision:
U.S. federal	$	309	$	607
U.S. state and local	64		68
Non-U.S	22		6
Total current tax provision	395		681
Deferred income tax provision:
U.S. federal	41		—
U.S state and local	—		—
Total deferred tax provision	41		—
Income tax provision	$	436	$	681

The Company is subject to income taxes in the U.S. federal jurisdiction, and various states, local and non-U.S. jurisdictions. The Company believes it has appropriate support for its federal income tax returns. The Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for fiscal years prior to 2008.

At December 31, 2013 and September 30, 2013, the Company recorded liabilities of $66 and $177, respectively, for uncertain tax positions and any related interest and penalties. The Company classifies any interest and penalties related to uncertain tax positions in income tax expense. A summary of activity related to the Company’s uncertain tax positions is as follows:



Balance at September 30, 2013	$	177
Decrease due to tax positions effectively settled	(111		)
Balance at December 31, 2013	$	66