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7. Income Taxes
 9 Months Ended
Mar. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

 

7. Income Taxes

 

We utilize the liability method of accounting for income taxes. The following table presents our effective tax rates based upon our provision for income taxes for the periods shown:

 

  Three Months Ended   Nine Months Ended
  March 31,   March 31,
  2021   2020   2021   2020
Effective tax rate 3%   1%   5%   1%

 

The difference between our effective tax rates in the periods presented above and the federal statutory rate is primarily due to a tax benefit from our domestic losses being recorded with a full valuation allowance, as well as the effect of foreign earnings taxed at rates differing from the federal statutory rate.

 

We record net deferred tax assets to the extent we believe it is more likely than not that these assets will be realized. Due to our cumulative losses and uncertainty of generating future taxable income, we have provided a full valuation allowance against our net deferred tax assets as of March 31, 2021 and June 30, 2020.