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Income Taxes
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9 Months Ended | ||||||||||||||
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Jun. 30, 2011
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| Income Taxes [Abstract] | |||||||||||||||
| Income Taxes |
Note 9. Income Taxes
The Company's effective tax rate for the nine months ended June 30, 2011 was 34.2%, compared to 35.3% for the same period last year. The fiscal 2011 tax rate reflects the favorable impact from implementation of European operating structure initiatives in fiscal 2011. In addition, the effective tax rates for the first nine months of fiscal 2011 and 2010 reflect the favorable impact of adjustments totaling $606 and $656, respectively, in income tax expense related to changes in estimated tax accruals and the closure of open tax periods. Excluding these adjustments from both periods, the Company's effective tax rate was 34.9% and 36.1% for the nine months ended June 30, 2011 and 2010, respectively. The Company's effective tax rate for the fiscal 2010 full year was 35.8%, excluding the impact of unusual items. The difference between the Company's effective tax rate and the Federal statutory rate of 35.0% primarily reflected the impact of state taxes, offset partially by lower foreign income taxes.
The Company had unrecognized tax benefits (excluding penalties and interest) of $3,056 and $3,422 on June 30, 2011 and September 30, 2010, respectively, all of which, if recorded, would impact the 2011 annual effective tax rate. It is reasonably possible that $99 of the unrecognized tax benefits could be recognized in the next 12 months primarily due to tax examinations and the expiration of statutes related to specific tax positions.
The Company classifies interest and penalties on tax uncertainties as a component of the provision for income taxes. The Company included $561 in interest and penalties in the provision for income taxes for the first nine months of fiscal 2011. Total penalties and interest accrued were $1,851 and $2,412 at June 30, 2011 and September 30, 2010, respectively. These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions.
The Company is currently under examination in several tax jurisdictions and remains subject to examination until the statute of limitations expires for those tax jurisdictions. As of June 30, 2011, the tax years that remain subject to examination by major jurisdiction generally are:
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