Income Taxes

6 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

The Company recorded an income tax benefit of $3.2 million and $7.9 million, respectively during the three and six months ended March 31, 2022. The benefit for the three months ended March 31, 2022, was primarily driven by the benefit on loss from operations during the period. The tax benefit for the six months ended March 31, 2022, was increased by a $4.5 million discrete stock compensation windfall benefit for tax deductions that exceeded the associated book compensation expense. The tax benefit for the six months ended March 31, 2022 was partially offset by a $0.6 million charge to increase the deferred tax liability to reflect a change in the blended state income tax rate that results from the sale of the semiconductor business assets.

The Company recorded an income tax benefit of $2.3 million and $3.9 million, respectively during the three and six months ended March 31, 2021. The tax benefit for the three months ended March 31, 2021, was primarily driven by the benefit on loss from operations during the period. The benefit for the six months ended March 31, 2021 was increased by a $2.0 million discrete stock compensation windfall benefit for tax deductions that exceeded the associated book compensation expense, respectively.

During March 2021, the United States enacted the American Rescue Plan Act of 2021. The Company evaluated the legislation of these Acts in relation to income taxes and determined that the income tax Acts do not have a material impact on its income tax provision.

The Company evaluates the realizability of its deferred tax assets by tax-paying component and assesses the need for a valuation allowance on a quarterly basis. The Company evaluates the profitability of each tax-paying component on

a historic cumulative basis and a forward-looking basis while performing this analysis. The Company maintains a U.S. valuation allowance related to the realizability of certain state tax credits and state net operating loss carry-forwards, as well as a valuation allowance against net deferred tax assets on certain foreign tax-paying components as of March 31, 2022. On February 1, 2022, the Company completed the sale of its semiconductor automation business that resulted in a taxable gain primarily recognized in the U.S. During the second quarter of fiscal year 2022, the Company recorded a reduction to its valuation allowance for the utilization of deferred tax assets that were previously expected to expire. The benefit of this valuation allowance reversal was recorded in income from discontinued operations in the amount of $3.6 million since the reversal was driven by the income from discontinued operations.

The Company maintains liabilities for uncertain tax positions. These liabilities involve judgment and estimation and are monitored based on the best information available. The Company recognizes interest related to unrecognized tax benefits as a component of the income tax provision or benefit. The Company recognized $0.1 million of interest expense related to its uncertain tax positions during the three and the six months ended March 31, 2022.

The Company is subject to U.S. federal, state, local and foreign income taxes in various jurisdictions. The amount of income taxes paid is subject to the Company’s interpretation of applicable tax laws in the jurisdictions in which it files.

In the normal course of business, the Company is subject to income tax audits in various global jurisdictions in which it operates. The years subject to examination vary for the U.S. and international jurisdictions, with the earliest tax year being 2013. Based on the outcome of these examinations or the expiration of statutes of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized tax benefits could change from those recorded in the Company’s Consolidated Balance Sheets. The Company currently anticipates that it is reasonably possible that the unrecognized tax benefits and accrued interest on those benefits will be reduced by an amount of $0.4 million in the next twelve months due to statute of limitations expirations. These unrecognized tax benefits would impact the effective tax rate if recognized.