Income Taxes |
3 Months Ended |
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Mar. 31, 2018 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes |
Income Taxes
The Company is part of a consolidated U.S. federal income tax return with Wyndham Worldwide and other subsidiaries that are not included in its Condensed Combined Financial Statements. Income taxes as presented in the Company’s Condensed Combined Financial Statements present current and deferred income taxes of the consolidated federal tax filing attributed to the Company using the separate return method. The separate return method applies the accounting guidance for income taxes to the financial statements as if the Company were a separate taxpayer. The Company is no longer subject to U.S. federal income tax examinations for years prior to 2014. The Company is no longer subject to state and local, or foreign, income tax examinations for years prior to 2009. During the three months ended March 31, 2018 and 2017, Wyndham Worldwide paid $11 million of federal and state income tax liabilities related to the Company, which is reflected in its Condensed Combined Financial Statements as an increase to Parent’s net investment. Additionally, the Company made foreign income tax payments, net of refunds, in the amount of $2 million during the three months ended March 31, 2018 and 2017.
The Company’s effective tax rates were 29.1% and 40.0% during the three months ended March 31, 2018 and 2017, respectively. The decrease was principally due to the reduction in the corporate income tax rate resulting from the enactment of the U.S. Tax Cuts and Jobs Act.
During the three months ended March 31, 2018, the Company did not record any additional measurement-period adjustments related to the impact from the U.S. Tax Cuts and Jobs Act recorded in 2017, since none of the Company’s estimates have changed from year-end. However, the Company is continuing to gather additional information to complete its accounting no later than December 31, 2018.
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