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INCOME TAXES
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The Company recorded income tax expense of $4.7 million and $11.4 million for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, the Company recorded income tax expense of $28.4 million and $39.1 million, respectively. The Company's effective income tax rate was 19.4% and 21.1% for the three months ended September 30, 2023 and 2022, respectively, and 25.0% and 22.3% for the nine months ended September 30, 2023 and 2022, respectively.

The Company’s 2023 and 2022 income tax expense and rates differed from the amount of income tax determined by applying the U.S. Federal income tax rate to pre-tax income primarily as a result of foreign income tax rate differential on the mix of earnings, non-deductible royalty expenses in certain foreign jurisdictions, and certain permanent foreign inclusion items on the domestic provision.

The Company continues to monitor the realization of its deferred tax assets and assesses the need for a valuation allowance. The Company analyzes available positive and negative evidence to determine if a valuation allowance is needed based on the weight of the evidence. This objectively verifiable evidence primarily includes the past three years' profit and loss positions. This process requires management to make estimates, assumptions, and judgments that are uncertain in nature. The Company has established valuation allowances with respect to certain deferred tax assets in the U.S. and certain foreign jurisdictions and continues to monitor and assess the need for valuation allowances in all its jurisdictions.

Brazilian Tax Credits
In June 2021, the Company’s Brazilian subsidiaries received a notice that they had prevailed on an existing legal claim in regards to certain non-income (indirect) taxes that had been previously charged and paid. The matter specifically relates to companies’ rights to exclude the state tax on goods circulation (a value-added-tax or VAT equivalent, known in Brazil as “ICMS”) from the calculation of certain additional indirect taxes (specifically the program of social integration (“PIS”) and contribution for financing of social security (“COFINS”) levied by the Brazilian States on the sale of goods.

During the second quarter of 2023, one of the Company’s Brazilian subsidiaries received a notice that they had prevailed on an additional legal claim in regards to the non-income (indirect) tax credits that had been granted in a prior year ruling. The most recent ruling exempted, the interest benefit on the indirect tax credits granted in prior year from taxation. For the nine months ended September 30, 2023, the Company recorded indirect tax credits of $0.5 million, within other income in the condensed consolidated statements of operations. The Company also recorded $2.6 million within provision for income taxes in the condensed consolidated statements of operations for the nine months ended September 30, 2023.

During the second and third quarter of 2022, the Company submitted the related supporting documentation and received approval from Brazilian tax authorities for the indirect tax credits for one of its Brazilian subsidiaries. For the three and nine months ended September 30, 2022, the Company recorded indirect tax credits of $9.5 million and $32.0 million within other income in the condensed consolidated statements of operations. The Company also recorded $1.6 million and $9.4 million of income tax expense associated with the recognition of these indirect tax credits for the three and nine months ended September 30, 2022.

The Company expects to be able to apply the tax credits received to settle the income tax liability that was incurred as a result of the credit. The Company also expects to utilize the majority of the credit against future PIS/COFINS and income tax obligations by the end of the year.