XML 27 R18.htm IDEA: XBRL DOCUMENT v3.22.2.2
Note 12 - Income Taxes
 9 Months Ended
Sep. 30, 2022
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 12 – Income Taxes

 

The Company is subject to income tax in multiple jurisdictions and the use of estimates is required to determine the provision for income taxes. For the three months ended  September 30, 2022 and 2021, the Company recorded an income tax provision of $2.1 million and $2.2 million, respectively. For the nine months ended September 30, 2022 and 2021, the Company recorded an income tax provision of $7.2 million and $5.8 million, respectively. The income tax provision is based on the estimated annual effective tax rate for the year applied to pre-tax income. The effective income tax rate for the three months ended  September 30, 2022 was 34.5 percent compared to 31.5 percent in the same period of the prior year. The effective tax rate increased by 3.0 percent for the three months ended  September 30, 2022 when compared to the same period in 2021, primarily due to an increase in losses in jurisdictions, mainly Japan, that are not eligible for tax benefits due to valuation allowances. The effective income tax rate for the nine months ended  September 30, 2022 was 38.4 percent compared to 21.2 percent in the same period of the prior year. The effective tax rate increased by 17.2 percent for the nine months ended  September 30, 2022 when compared to the same period in 2021, primarily due to a decrease in tax benefits from the vesting of restricted stock and the exercise of stock options, as well as an increase in losses in jurisdictions, mainly Japan, that are not eligible for tax benefits due to valuation allowances. 

 

The effective income tax rate for the nine months ended September 30, 2022 differs from the U.S. federal statutory rate of 21.0 percent due to various factors, including operating in multiple state and foreign jurisdictions and tax credits for which the Company qualifies.

 

The Company had unrecognized tax benefits totaling $4.5 million as of September 30, 2022 and $4.4 million as of  December 31, 2021, respectively, that if recognized would result in a reduction of the Company’s effective tax rate. The liabilities are classified as other long-term liabilities in the accompanying consolidated balance sheets. The Company recognizes interest and penalties related to income tax matters in income tax expense and reports the liability in current or long-term income taxes payable as appropriate.