Income Taxes

The gross liability for unrecognized tax benefits at March 31, 2016 and December 31, 2015 was $14,990 and $14,517, respectively, exclusive of interest and penalties, of which $13,372 and $12,898 would affect the effective tax rate if the Company were to recognize the tax benefit.

The Company classifies interest and penalties on unrecognized tax benefits as income tax expense. As of March 31, 2016 and December 31, 2015, the combined amount of accrued interest and penalties related to tax positions taken on tax returns was $1,497 and $1,391, respectively.



	March 31, 2016		December 31, 2015
Gross liability for unrecognized tax benefits, exclusive of interest and penalties	$	14,990	$	14,517
Interest and penalties on unrecognized benefits	1,497		1,391
Total gross uncertain tax positions	$	16,487	$	15,908
Amount included in Current liabilities	$	4,811	$	4,511
Amount included in Other long-term liabilities	11,676		11,397
	$	16,487	$	15,908

The Company’s effective tax rate was 35.2 percent and 35.4 percent for the three months ended March 31, 2016 and 2015, respectively. The decrease in the tax rate for the three months ended March 31, 2016 was primarily due to the permanent reinstatement of the Research and Development Tax Credit enacted during the fourth quarter 2015. The credit was included in the Company's tax rate in the three months ended March 31, 2016 but was not included in the three months ended March 31, 2015 due to its expired status. The decrease in the Company's tax rate was partially offset by the loss of foreign tax credits.

The Company files income tax returns in the United States on a consolidated basis and in many U.S. state and foreign jurisdictions. The Company is subject to examination of income tax returns by the Internal Revenue Service (IRS) and other domestic and foreign tax authorities. The Company is no longer subject to U.S. federal income tax examination for years before 2012 and is no longer subject to state, local or foreign income tax examinations by authorities for years before 2008.

The Company estimates it will recognize $4,811 of gross unrecognized tax benefits which is expected to be paid within one year due to the expiration of the statute of limitations and resolution of income tax audits and is netted against the current payable account. These unrecognized tax benefits are related to tax positions taken on certain federal, state, and foreign tax returns. However, the timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. While it is reasonably possible that some issues under examination could be resolved in the next twelve months, based upon the current facts and circumstances, the Company cannot reasonably estimate the timing of such resolution or the total range of potential changes as it relates to the current unrecognized tax benefits that are recorded as part of the Company’s financial statements.