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Income Taxes
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3 Months Ended | |||||||||||||||||||||
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Dec. 31, 2011
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| Income Taxes |
Note 9. Income Taxes
Income tax provisions for the Company's interim periods are based on the effective income tax rate expected to be applicable for the full year. The Company's effective tax rate for the three months ended December 31, 2011 was 34.6%, compared to 35.9% for the first quarter of fiscal 2011. The difference between the Company's fiscal 2012 first quarter effective tax rate and the Federal statutory rate of 35.0% primarily reflected the impact of state taxes, offset by lower foreign income taxes.
The Company had unrecognized tax benefits (excluding penalties and interest) of $3,685 and $2,928 on December 31, 2011 and September 30, 2011, respectively, all of which, if recorded, would impact the 2012 annual effective tax rate. It is reasonably possible that $340 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 $163 in interest and penalties in the provision for income taxes for the first quarter of fiscal 2012. Total penalties and interest accrued were $2,005 and $1,842 at December 31, 2011 and September 30, 2011, 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 December 31, 2011, the tax years that remain subject to examination by major jurisdiction generally are:
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