Income Taxes

6 Months Ended

Mar. 31, 2012

Income Taxes [Abstract]

Income Taxes

15. Income Taxes

The Company recorded income tax provisions associated with income from continuing operations of $1.2 million and $1.8 million for the three months ended March 31, 2012 and 2011, respectively, representing effective tax rates of 39.0% and 38.4%, respectively. The Company recorded income tax provisions associated with income from continuing operations of $2.5 million and $3.2 million for the six months ended March 31, 2012 and 2011, respectively, representing effective tax rates of 37.5% and 36.1%, respectively. The difference between the U.S. federal statutory tax rate of 35.0% and the Company’s effective tax rate for the three and six months ended March 31, 2012 and 2011 reflects the impact of state income taxes, permanent tax items and discrete tax benefits.

The Company recorded an income tax expense from discontinued operations of $0.1 million and an income tax benefit from discontinued operations of $1.8 million for each of the three months ended March 31, 2012 and 2011, respectively. The Company recorded an income tax expense from discontinued operations of $1.0 million and an income tax benefit from discontinued operations of $2.5 million for each of the six months ended March 31, 2012 and 2011, respectively. The Company recorded an income tax benefit of $0.1 million and $0.7 million from the sale of discontinued operations for the three and six months ended March 31, 2012. The effective tax rate applied to discontinued operations was 14.4% and 84.6% for the three months ended March 31, 2012 and 2011, respectively, and 51.4% and 21.2% for the six months ended March 31, 2012 and 2011, respectively. The tax rate for the six months ended March 31, 2011 is lower than the U.S. federal statutory tax rate of 35.0% because of a non-deductible goodwill impairment charge of $5.7 million on a pre-tax loss of $11.9 million.

The total amount of unrecognized tax benefits including interest and penalties that, if recognized, would affect the effective tax rate as of March 31, 2012 and September 30, 2011, respectively, are $1.5 million and $1.6 million. Currently, the Company does not expect the liability for unrecognized tax benefits to change significantly in the next 12 months with the above balances classified on the condensed consolidated balance sheets in other long-term liabilities. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense.

The Company files income tax returns, including returns for its subsidiaries, in the U.S. federal jurisdiction and in various state jurisdictions. Uncertain tax positions are related to tax years that remain subject to examination. The Internal Revenue Service (“IRS”) commenced an examination of the Company’s U.S. income tax return for fiscal 2010 in the first quarter of fiscal 2012. The IRS completed an examination of the Company’s U.S. income tax return for fiscal 2009 and a payment was made in the third quarter of fiscal 2011 associated with timing adjustments. U.S. income tax returns for fiscal 2007 and 2008 remain subject to examination by federal tax authorities. Tax returns for state and local jurisdictions for fiscal years 2003 through 2010 remain subject to examination by state and local tax authorities.