13.

Income Taxes

The Company recorded income tax provisions associated with income from continuing operations of $1.9 million and $1.7 million for the three months ended June 30, 2015 and 2014, respectively, representing effective tax rates of 32.9% and 32.0%, respectively. The Company recorded income tax provisions associated with income from continuing operations of $4.9 million and $4.4 million for the nine months ended June 30, 2015 and 2014, respectively, representing effective tax rates of 31.5% and 31.1%, 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 nine months ended June 30, 2015 and 2014 reflects the impact of state income taxes, permanent tax items such as valuation allowance releases associated with net gains from our strategic investments and our available-for-sale securities portfolio, discrete tax benefits and the Section 199 manufacturing deduction. Discrete tax benefits aggregated less than $0.1 million and $0.3 million for the three and nine months ended June 30, 2015, respectively, as well as the same respective periods ended June 30, 2014.

The discrete tax items in the fiscal 2015 nine-month period includes a $0.2 million income tax benefit associated with the December 2014 signing of the Tax Increase Prevention Act of 2014 which retroactively reinstated the federal research and development income tax credit, which had previously expired in December 2013.

The nine months ended June 30, 2015 income tax provision includes the impact of a $0.5 million gain from the sale of Intersect ENT with an offsetting reversal of a capital loss carryforward valuation allowance. The nine months ended June 30, 2014 income tax provision includes the impact of gains related to two Vessix Vascular, Inc. contingent consideration payments totaling $0.7 million and gains related to certain debt securities in our available-for-sale securities portfolio of $0.1 million. Each of these gains has had a tax expense recognized which has been fully offset by the reversal of capital loss carryforward valuation allowances.

The Company did not have any discontinued operations activity in the three and nine months ended June 30, 2015. The Company recorded an income tax benefit from discontinued operations of less than $0.1 million in each of the three and nine months ended June 30, 2014 which resulted in an effective tax rate associated with discontinued operations of 34.8% in each period.

The total amount of unrecognized tax benefits, including interest and penalties that, if recognized, would affect the effective tax rate as of June 30, 2015 and September 30, 2014, respectively, are $1.0 million and $0.9 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. U.S. income tax returns for years prior to fiscal 2012 are no longer subject to examination by federal tax authorities. For tax returns for state and local jurisdictions, the Company is no longer subject to examination for tax years generally before fiscal 2004.