INCOME TAXES

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

The effective tax rate for the three and six months ended June 30, 2022 was 26.5% and 22.6%, respectively. The effective tax rate for the three and six months ended June 30, 2021 was 21.6% and 18.1%, respectively. Wesco’s effective tax rate typically differs from the federal statutory income tax rate due to the tax effect of intercompany financing, foreign tax rate differences, the U.S. taxes imposed on foreign income, nondeductible expenses and state income taxes. For the three months ended June 30, 2022 and 2021, the effective tax rate reflects discrete income tax benefits of $0.3 million and $3.4 million, respectively, resulting from the exercise and vesting of stock-based awards. These discrete income tax benefits reduced the estimated annual effective tax rate by approximately 0.1 and 2.2 percentage points, respectively. For the six months ended June 30, 2022 and 2021, the effective tax rate reflects discrete income tax benefits of $13.4 million and $8.3 million, respectively, resulting from reductions to the valuation allowance recorded against foreign tax credit carryforwards, as well as the exercise and vesting of stock-based awards of $6.1 million and $4.5 million, respectively. These discrete income tax benefits reduced the estimated annual effective tax rate in such periods by approximately 3.7 and 5.9 percentage points, respectively.

There have been no material adjustments to liabilities for uncertain tax positions since the last annual disclosure for the year ended December 31, 2021.