INCOME TAXES |
9 Months Ended |
|---|---|
Sep. 30, 2020 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES We are subject to U.S. federal, state and international income taxes. We are generally no longer subject to federal, state, or international income tax examinations by tax authorities for years before 2017 with few exceptions. Due to the potential for resolution of state and foreign examinations, and the expiration of various statutes of limitations, it is reasonably possible that our gross unrecognized tax benefit balance may change within the next twelve months by a range of $0 to $1.4 million.
Effective Tax Rate
Our effective income tax rate was 25.1% for the three months ended September 30, 2020, compared to 14.5% for the three months ended September 30, 2019. Our third quarter effective 2020 tax rate was adversely impacted by the tax treatment associated with the gain on the fair value adjustment of the Brazil investment.
Our effective income tax rate was 24.1% for the nine months ended September 30, 2020, compared to an 11.7% benefit for the nine months ended September 30, 2019. Our effective tax rate was higher year-to-date for 2020 as compared to 2019 due to permanent tax differences resulting from the accrual for losses associated with certain legal proceedings and investigations related to the 2017 cybersecurity incident included in the 2019 effective tax rate. The 2020 year-to-date rate has been adversely impacted by valuation allowances against the deferred tax assets of certain international operations as well as the tax treatment associated with the gain on the fair value adjustment of the Brazil investment. However, these impacts were partially offset by favorable adjustments related to the 2019 legal proceedings. 2019 income taxes were calculated using the discrete method, applying the actual year-to-date effective tax rate to our pre-tax loss.
On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (The CARES Act), also known as the Third COVID-19 Supplemental Relief bill, and the President of the United States signed the legislation into law. The provisions of the legislation have not had a significant impact on the effective tax rate or the income tax payable and deferred income tax positions of the Company.
The adverse economic effects of the current COVID-19 pandemic have caused the Company to reassess the need for valuation allowances against deferred tax assets. As a result of this analysis the Company determined it was necessary to place valuation allowances against deferred tax assets of certain subsidiaries. The total amount of the valuation allowances recorded year-to-date is approximately $7.0 million.
|