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Note 10 - Income Taxes
 9 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 10. Income Taxes

 

For interim income tax reporting, we estimate our annual effective tax rate and apply this effective tax rate to our year-to-date pre-tax income. Each quarter, our estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. Additionally, the tax effects of significant unusual or infrequently occurring items are recognized as discrete items in the interim period in which the events occur. There is a potential for volatility in the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which they relate, changes in tax laws and foreign tax holidays, settlement with taxing authorities, and foreign currency fluctuations.

 

Our effective income tax rate was (8.7)% and 207.5% for the three and nine months ended December 31, 2023, respectively, compared to 76.5% and 384.8% for the three and nine months ended December 31, 2022, respectively. The effective tax rate for the three and nine months ended December 31, 2023 differed from the statutory federal rate of 21% primarily due to the share-based payment awards for employees and the effect of income generated in foreign jurisdictions. The change in our effective tax rate for the three and nine months ended December 31, 2023 compared to the prior periods is primarily due to lower windfall benefits on stock option exercises.