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Note 7 - Income Taxes
 9 Months Ended
Sep. 30, 2022
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

7.

Income Taxes

 

Our effective income tax rate was 22.7% for the three months ended September 30, 2022, compared to 23.7% for the three months ended September 30, 2021. Our effective income tax rate was 24.0% for the first nine months of 2022, compared to 24.5% in 2021. In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate, adjusted for discrete items. This rate is based on our expected annual income, statutory tax rates, best estimate of nontaxable and nondeductible items of income and expense, and the ultimate outcome of tax audits.

 

At September 30, 2022, we had a total of $87.8 million in gross unrecognized tax benefits, which are a component of other long-term liabilities on our Condensed Consolidated Balance Sheets. Of this amount, $74.5 million represents the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate. The total amount of accrued interest and penalties for such unrecognized tax benefits was $9.0 million at September 30, 2022.

 

In August 2022, the Inflation Reduction Act of 2022 was signed into law. This legislation includes significant changes relating to tax, climate change, energy and health care. The major tax provisions in the law include a corporate alternative minimum tax (CAMT) on certain large corporations and an excise tax on certain share repurchases, both effective January 1, 2023. The CAMT is not expected to impact us on the effective date, and the excise tax on share repurchases is not expected to have a material impact on our financial statements.