Income Taxes |
3 Months Ended |
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Apr. 01, 2023 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes
The effective tax rate for the three months ended September 30, 2023 and October 1, 2022 was 28.9 percent and 21.7 percent, respectively. The effective tax rate for the three months ended September 30, 2023 was higher than the same period in the prior year, primarily due to completing two additional intercompany sales of certain intellectual property rights ("IP rights"), from the Netherlands and New Zealand, to the United States. The completion of these intercompany sales resulted in an $11.8 million discrete income tax expense.
The effective tax rate for the nine months ended September 30, 2023 and October 1, 2022 was 33.4 percent and 21.6 percent, respectively. The effective tax rate for the nine months ended September 30, 2023 was higher than the same period in the prior year, primarily due to intercompany sales of certain IP rights in the first and third quarters of 2023, to better align the ownership of these rights with how our business operates. The completion of the IP rights sales from our affiliates in Norway, the Netherlands and New Zealand to the United States resulted in a discrete income tax expense of $52.9 million in the first quarter of 2023 and $11.8 million in the third quarter of 2023. The $52.9 million income tax expense will be paid over time, as permitted under current Norwegian tax law. There is no deferment of the $11.8 million income tax expense. The Company is regularly audited by federal, state and foreign tax authorities. The Internal Revenue Service ("IRS") has completed its field examination and has issued its Revenue Agents Report through the 2014 tax year and all open issues have been resolved. The Company is currently open to tax examinations by the IRS for the 2019 through 2021 tax years. The Company is open to state and local tax audits in major tax jurisdictions dating back to the 2017 taxable year. The Company is no longer subject to income tax examinations by any major foreign tax jurisdiction for years prior to 2015.
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