Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.10.0.1
Income Taxes
3 Months Ended
Dec. 31, 2018
Notes to Financial Statements  
11. Income Taxes

The following table presents the provision for income taxes and our effective tax rate for the three months ended December 31, 2018 and 2017:

 

    Three Months Ended,
December 31,
 
    2018     2017  
Provision for Income Taxes     523       (28 )
Effective Tax Rate     -17 %     2 %

 

The effective income tax rate on operations is based upon the estimated income for the year, and adjustments, if any, in the applicable quarterly periods for the potential tax consequences, benefits, resolutions of tax audits or other tax contingencies.

 

Our effective tax rate for the three months ended December 31, 2018 is lower than the statutory tax rate primarily due to an increase in the deferred tax liability related to indefinite lived assets. Other than the deferred tax liability relating to indefinite lived asset, the Company is maintaining a full valuation allowance against the remaining net DTA position.

 

Our effective tax rate for the three months ended December 31, 2017 is lower than the statutory tax rate primarily due to a tax provision for state income taxes and an increase in the deferred tax liability related to indefinite lived assets being offset by a discrete tax benefit recorded for the impact from the US Tax Reform. The tax provision for the three months ended December 31, 2017 includes discrete tax benefit totaling $0.4 million relating to the US Tax Reform.

 

On December 22, 2017, President Trump signed into law the “Tax Cuts and Jobs Act” ("US Tax Reform"). The US Tax Reform provides for significant changes in the U.S. Internal Revenue Code of 1986, as amended. Certain provisions of the US Tax Reform became effective during our fiscal year ending September 30, 2018 with all provisions of the US Tax Reform effective as of the beginning of our fiscal year ending September 30, 2019.

 

During the period ending December 31, 2017, we recorded tax charges for the impact of the Tax Act effects using the current available information and technical guidance on the interpretations of the US Tax Reform. As permitted by SEC Staff Accounting Bulletin 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, we recorded provisional estimates and have subsequently finalized our accounting analysis based on the guidance, interpretations, and data available as of December 31, 2018 with no material adjustments to our consolidated financial statements from what was originally recorded.