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INCOME TAX EXPENSE | 9 Months Ended
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Jun. 30, 2020
INCOME TAX EXPENSE |
INCOME TAX EXPENSE | 10. INCOME TAX EXPENSE The third quarter 2020 effective income tax rate from continuing operations was 14.3% compared to 19.5% in the third quarter of 2019. The effective income tax rate in the first nine months of 2020 was 15.9% compared to 19.4% for the first nine months of 2019. The income tax expense in the third quarter and first nine months of 2020 was favorably impacted by the following items: 1) additional tax benefits on share-based compensation that vested during the quarter decreasing the third quarter and year-to-date effective tax rate by 1.4% and 0.6%, respectively; 2) research credits and other 2019 tax return to provision true-ups decreasing the third quarter and year-to-date effective tax rate by 1.6% and 0.6%, respectively; and 3) an increase in the available 2019 and 2020 foreign tax credit which was attributable to new information and tax planning strategies, for which the combined effect was a 6.3% reduction in the third quarter effective tax rate and a 2.4% reduction in the year-to-date effective tax rate. The income tax expense was favorably impacted in the second quarter of 2020 by the release of a valuation allowance of $2.8 million for foreign net operating losses decreasing the year-to-date effective tax rate by 5.1%. ​ The income tax expense in the third quarter and first nine months of 2019 was favorably impacted by tax planning strategies to increase the foreign tax credits claimed retrospectively. The Company reduced the valuation allowance for excess foreign tax credits by $2.4 million ($2.3 million in the second quarter of 2019 and $0.1 million in the third quarter of 2019) and recorded an amended return receivable of $0.3 million ($0.2 million in the second quarter of 2019 and $0.1 million in the third quarter of 2019) which favorably impacted the third quarter and year-to-date effective tax rate of 2019 by 1.4% and 4.3%, respectively. Income tax expense in the third quarter and first nine months of 2019 was also favorably impacted by additional tax benefits on share-based compensation that vested during the quarter decreasing the effective tax rate by 1.8% and 0.6%, respectively. A non-automatic accounting method change filed with the 2018 tax return was approved by the Internal Revenue Service during the third quarter of 2019 and favorably impacted the third quarter and year-to-date effective tax rate by 1.1% and 0.4%, respectively.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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