Income Taxes |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | 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 consolidated income taxes for the first nine months of fiscal 2025 represented an expense of $38,391, compared to a benefit of $10,677 for the first nine months of fiscal 2024. The difference between the Company’s consolidated income taxes for the first nine months of fiscal 2025 compared to the same period for fiscal 2024 resulted from consolidated pre-tax income in fiscal 2025 compared to a consolidated pre-tax loss in fiscal 2024, net discrete tax expense related to the divestiture of the Company's interest in the SGK Business, net discrete tax benefits related to adjustments in tax reserves resulting from the progression of tax audits, and recognition of certain previously unrecognized deferred tax assets. The Company’s fiscal 2025 nine month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to state taxes, tax credits, non-tax benefited foreign losses, discrete tax related to the sale of the Company's interest in the SGK Business, and other net discrete tax benefits. The Company’s fiscal 2024 nine month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to tax credits, jurisdictional tax rate netting, recognition of certain previously unrecognized deferred tax assets and other net discrete tax benefits.
The Company had unrecognized tax benefits (excluding penalties and interest) of $2,051 and $4,506 on June 30, 2025 and September 30, 2024, respectively, which would impact the annual effective rate at June 30, 2025 and September 30, 2024, respectively. It is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately $366 in the next 12 months primarily due to the completion of audits and the expiration of the statute of limitations.
The Company classifies interest and penalties on tax uncertainties as a component of the provision for income taxes. Total penalties and interest accrued were $248 and $588 at June 30, 2025 and September 30, 2024, respectively. These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company is currently assessing the impact on its consolidated financial statements.
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, 2025, the tax years that remain subject to examination by major jurisdictions generally are:
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