Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

6. INCOME TAXES

For continuing operations, including noncontrolling interests, the statutory U.S. federal income tax rate reconciles to DESC’s effective income tax rate as follows:

Three Months Ended March 31,	2023			2022
U.S. statutory rate		21.0	%		21.0	%
Increases (reductions) resulting from:
State taxes, net of federal benefit		4.1			4.0
Reversal of excess deferred income taxes		(4.7	)		(5.3	)
Allowance for equity funds used during construction		—			(0.2	)
Settlements of uncertain tax positions		(9.9	)		—
Other, net		(0.1	)		—
Effective tax rate		10.4	%		19.5	%

As of March 31, 2023, DESC’s effective tax rate reflects an income tax benefit of $11 million from the effective settlement of a position that management believed was reasonably possible to occur. Otherwise, there have been no material changes in DESC’s unrecognized tax benefits or possible changes that could reasonably be expected to occur during the next twelve months. See Note 7 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of these unrecognized tax benefits.