Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2020 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes |
15. Income Taxes:
The effective income tax rate for the three months ended September 30, 2020 was 60.1% compared to 38.4% for the three months ended September 30, 2019. The effective income tax rate for the nine months ended September 30, 2020 was 54.5% compared to 39.3% for the nine months ended September 30, 2019. The Company’s effective income tax rate has fluctuated primarily due changes in income mix (including the effect of loss companies), the impacts of the Global Intangible Low Taxed Income (“GILTI”) tax rules, discrete impacts related to product line and asset sales and changes in foreign exchange gains and losses, which create permanent differences in certain jurisdictions.
The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the nine months ended September 30, 2020 was mainly due to the impacts of GILTI, the discrete tax impacts of the Company entering into an asset swap agreement, the discrete impacts of the product line and asset sales, the tax effect of permanent differences related to foreign currency exchange gain or loss, foreign tax rate changes, pre-tax losses with no associated tax benefit and state taxes.
The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the nine months ended September 30, 2019 was mainly due to the tax effect of permanent differences related to foreign currency exchange gain or loss, inclusion of foreign earnings in U.S. taxable income, pre-tax losses with no associated tax benefit, the discrete tax effects of the Company’s sale of a non-core product line and state taxes.
With respect to operating results for the three and nine months ended September 30, 2020, the Company has continued to incorporate an estimate of the GILTI income inclusion when estimating annual effective tax rate used for GAAP purposes. The Company expects this amount to be included in its 2020 U.S. taxable income. However, the estimated 2020 GILTI income inclusion may change materially as the Company continues to evaluate future legislative or administrative guidance that is put forth, any updates to assumptions and figures used for the current estimate, or as a result of future changes to the Company’s current structure and business.
|