XML 31 R21.htm IDEA: XBRL DOCUMENT v3.23.1
Income Taxes
 6 Months Ended
Mar. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Our income tax expense, deferred tax assets and liabilities, and unrecognized tax benefits reflect management's best assessment of estimated current and future liabilities. We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.
Unrecognized Tax Benefits
As of March 31, 2023, the total amount of gross unrecognized tax benefits was $77.4 million, of which $53.8 million, if recognized, would reduce our effective tax rate. As of September 30, 2022, the total amount of gross unrecognized tax benefits was $69.7 million, of which $44.0 million, if recognized, would reduce our effective tax rate. The fiscal year-to-date period ended March 31, 2023 increase was primarily due to current year reserves for transfer pricing and interest accruals. Our liability for unrecognized tax benefits is classified within other non-current liabilities in our unaudited interim condensed consolidated balance sheets.
Effective Tax Rate
Each period, the combination of multiple different factors can impact our effective tax rate. These factors include both recurring items such as tax rates and the relative amount of income earned in foreign jurisdictions, as well as discrete items that may occur in, but are not necessarily consistent between periods.
Our effective tax rate in the second quarter of fiscal 2023 was 18.2% or a tax expense of $21.4 million and our effective tax rate in the second quarter of fiscal 2022 was 16.0% or a tax expense of $6.9 million. The increase in our effective tax rate was primarily due to a shift in the mix of earnings to jurisdictions with higher tax rates and lower tax benefits related to settlement of stock-based awards.
Our effective tax rate in the fiscal year-to-date period ended March 31, 2023 was 19.3% or a tax expense of $41.9 million and our effective tax rate in the fiscal year-to-date period ended April 1, 2022 was 13.6% or a tax expense of $18.4 million. The increase in our effective tax rate was primarily due to lower tax benefits related to settlement of stock-based awards and a shift in the mix of earnings to jurisdictions with higher tax rates.
Compared to the Federal statutory rate of 21%, our effective tax rates for the second quarter of fiscal 2023 and fiscal year-to-date period ended March 31, 2023 were lower primarily due to the mix of earnings favoring jurisdictions with lower tax rates.