|9 Months Ended
Sep. 30, 2022
|Income Tax Disclosure [Abstract]
Interim income taxes are based on an estimated annualized effective tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. Although the Company believes its tax estimates are reasonable, the Company can make no assurance that the final tax outcome of these matters will not be different from that which it has reflected in its historical income tax provisions and accruals. Such differences could have a material impact on the Company’s income tax provision and operating results in the period in which the Company makes such determinations.
The Company is subject to income taxes in the United States and Australia. Significant judgment is required in evaluating the Company’s tax positions and determining the provision for income taxes. During the ordinary course of business, the Company considers tax positions for which the ultimate tax determination is uncertain for the purpose of determining whether a reserve is required, despite the Company’s belief that the tax positions are fully supportable. To date the Company has not established a reserve provision because the Company believes that all tax positions are highly certain.
The Company’s provision for income taxes for the three and nine months ended September 30, 2022 resulted in income tax expense of $0.1 million and a benefit of $0.2 million, respectively. The effective tax rate as a percentage of loss before income taxes for the three and nine months ended September 30, 2022 was -612.5% and 6.8%, respectively, compared to the U.S. federal statutory rate of 21.0%. The lower effective tax rate for the three and nine months ended September 30, 2022 was primarily due to discrete tax adjustments which offset the income tax benefit related to loss before income taxes.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef