Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Our effective tax rate (ETR) was 26% and 25% for the three months ended September 30, 2022 and 2021, respectively, and 27% and 24% for the nine months ended 2022 and 2021, respectively. The increase in our ETR for the three and nine months ended September 30, 2022 when compared to the same periods in 2021 was primarily due to a decrease in excludable income for state tax purposes and decrease in tax benefits related to stock-based compensation. Furthermore, our ETR in the prior year periods benefited from a favorable adjustment of our previously disputed receivable from the IRS.

During the nine months ended September 30, 2022, there was a decrease of $1 million in our unrecognized tax benefits. The total amount of gross interest and penalties accrued was immaterial. It is reasonably possible the amount of the unrecognized benefit could increase or decrease within the next 12 months for which an estimate of the impact on net income cannot be made.

We are subject to tax in U.S. federal and various state and local jurisdictions, as well as Canada and India. We are open to federal and significant state income tax examinations for tax years 2016 and subsequent years.