8.	Income taxes

We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current period. The effective tax rates for the three and nine months ended July 31, 2017 were 28.8% and 29.8%, respectively. The effective tax rate for the three and nine months ended July 31, 2016 were 28.2% and 25.5%, respectively.

During the nine months ended July 31, 2017, we recorded a discrete tax expense of $2,600 related to nondeductible acquisition costs.

During the three months ended July 31, 2016, we recorded a favorable adjustment to unrecognized tax benefits of $1,651 related to the effective settlement of a tax exam.

On December 18, 2015, the Protecting Americans from Tax Hikes Act of 2015 was enacted which retroactively reinstated the Federal Research and Development Tax Credit (Federal R&D Tax Credit) as of January 1, 2015, and made it permanent. As a result, our income tax provision for the nine months ended July 31, 2016 includes a discrete tax benefit of $2,025 primarily related to 2015. The tax rate for the nine months ended July 31, 2016 also includes a discrete tax benefit of $6,184 related to dividends paid from previously taxed foreign earnings generated prior to 2015 and $1,136 related to the effective settlement of a tax exam.