10.	INCOME TAXES

Our effective tax rate for the nine months of fiscal 2017 was 29% compared to 28% for the same period in fiscal 2016. The increase in the effective income tax rate was due primarily to changes in the geographic mix of income or loss between tax jurisdictions.

We recorded income tax expense of $3.4 million during the nine months of fiscal 2017, compared to $4.1 million for the corresponding period in fiscal 2016, primarily as a result of a decrease in pre-tax income period-over-period. We have not provided for any U.S. income taxes on the undistributed earnings of our wholly-owned foreign subsidiaries based upon our determination that such earnings will be indefinitely reinvested. In the event these earnings are later distributed to our U.S. operations, such distributions would likely result in additional U.S. tax that may be offset, at least in part, by associated foreign tax credits.

Our unrecognized tax benefits were $1.2 million as of July 31, 2017 and $1.1 million as of October 31, 2016, and in each case included accrued interest.

We recognize accrued interest and penalties related to unrecognized tax benefits as components of income tax expense. As of July 31, 2017, the gross amount of interest accrued, reported in Accrued expenses and other, was approximately $62,000, which did not include the federal tax benefit of interest deductions.

We file U.S. federal and state income tax returns, as well as tax returns in several foreign jurisdictions. The statutes of limitations with respect to unrecognized tax benefits will expire between July 2018 and July 2019. We are under audit by the Internal Revenue Service (IRS) for our federal income tax return for fiscal year 2015.