Income Taxes |
9 Months Ended | ||||||
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Sep. 30, 2022 | |||||||
Income Tax Disclosure [Abstract] | |||||||
Income Taxes |
The Company files income tax returns in the U.S. federal and state jurisdictions, as well as in foreign jurisdictions. Through May 31, 2018, the Company was part of a consolidated U.S. federal income tax return and consolidated and combined state returns with Wyndham Worldwide (“former Parent”), now known as Travel + Leisure Co. The Company is no longer subject to federal, state and local, or foreign, income tax examinations for years prior to 2015.
On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law in the United States. The Company does not currently expect the IRA to have a material impact on its financial results, including on its annual estimated effective tax rate or liquidity.
The Company made cash income tax payments, net of refunds, of $75 million and $49 million for the nine months ended September 30, 2022 and 2021, respectively. Additionally, the Company had $4 million and $48 million of income tax receivables as of September 30, 2022 and December 31, 2021, respectively, which was reported on other current assets on the Condensed Consolidated Balance Sheets.
The Company’s effective tax rates were 27.3% and 25.9% during the three months ended September 30, 2022 and 2021, respectively. The change was primarily due to the mix of earnings and losses between the U.S. and foreign jurisdictions in which the Company operates that have different tax rates from the U.S. statutory rate. The Company’s effective tax rates were 25.8% and 27.0% during the nine months ended September 30, 2022 and 2021, respectively. The change was primarily due to the mix of earnings and losses between the U.S. and foreign jurisdictions in which the Company operates that have different tax rates from the U.S. statutory rate, as well as the remeasurement of net deferred tax liabilities as a result of changes in certain state tax rates.
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