MTB » Topics » Income taxes

These excerpts taken from the MTB 10-K filed Feb 23, 2009.
Income Taxes
The provision for income taxes was $184 million in 2008, compared with $309 million in 2007 and $392 million in 2006. The effective tax rates were 24.9%, 32.1% and 31.9% in 2008, 2007 and 2006, respectively. The significant decline in the Company’s effective tax rate from 2007 to 2008 reflects the resolution in 2008 of previously uncertain tax positions related to the Company’s activities in various jurisdictions during the years 1999-2007 that allowed the Company to reduce its accrual for income taxes in the third quarter of 2008 by $40 million. Exclusive of the impact of the $40 million credit to income taxes, the effective tax rate in 2008 was 30.3%.
The effective tax rate is impacted by the level of income earned that is exempt from tax relative to the overall level of pre-tax income and by the level of income allocated to the various state and local jurisdictions where the Company operates, because tax rates differ among those jurisdictions. Although

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the other-than-temporary impairment charges during 2008 and 2007 are fully deductible for purposes of computing income tax expense, those charges had an impact on the effective tax rate because they significantly lowered pre-tax income relative to the amounts of tax-exempt income and other permanent differences that impact the effective tax rate. Excluding the impact of the (i) other-than-temporary impairment charges from pre-tax income and income tax expense in 2008 and 2007 and (ii) the $40 million credit to income tax expense in 2008 resulting from the resolution of previously unrecognized tax benefits, the Company’s effective tax rates for 2008 and 2007 would have been 32.0% and 32.9%, respectively.
The Company’s effective tax rate in future periods will also be affected by the results of operations allocated to the various tax jurisdictions within which the Company operates, any change in income tax regulations within those jurisdictions, or interpretations of income tax regulations that differ from the Company’s interpretations by any of various tax authorities that may examine tax returns filed by M&T or any of its subsidiaries. Information about amounts accrued for uncertain tax positions and a reconciliation of income tax expense to the amount computed by applying the statutory federal income tax rate to pre-tax income is provided in note 13 of Notes to Financial Statements.
 
Income Taxes
The provision for income taxes was $184 million in 2008, compared with $309 million in 2007 and $392 million in 2006. The effective tax rates were 24.9%, 32.1% and 31.9% in 2008, 2007 and 2006, respectively. The significant decline in the Company’s effective tax rate from 2007 to 2008 reflects the resolution in 2008 of previously uncertain tax positions related to the Company’s activities in various jurisdictions during the years 1999-2007 that allowed the Company to reduce its accrual for income taxes in the third quarter of 2008 by $40 million. Exclusive of the impact of the $40 million credit to income taxes, the effective tax rate in 2008 was 30.3%.
The effective tax rate is impacted by the level of income earned that is exempt from tax relative to the overall level of pre-tax income and by the level of income allocated to the various state and local jurisdictions where the Company operates, because tax rates differ among those jurisdictions. Although

69


Table of Contents

 
the other-than-temporary impairment charges during 2008 and 2007 are fully deductible for purposes of computing income tax expense, those charges had an impact on the effective tax rate because they significantly lowered pre-tax income relative to the amounts of tax-exempt income and other permanent differences that impact the effective tax rate. Excluding the impact of the (i) other-than-temporary impairment charges from pre-tax income and income tax expense in 2008 and 2007 and (ii) the $40 million credit to income tax expense in 2008 resulting from the resolution of previously unrecognized tax benefits, the Company’s effective tax rates for 2008 and 2007 would have been 32.0% and 32.9%, respectively.
The Company’s effective tax rate in future periods will also be affected by the results of operations allocated to the various tax jurisdictions within which the Company operates, any change in income tax regulations within those jurisdictions, or interpretations of income tax regulations that differ from the Company’s interpretations by any of various tax authorities that may examine tax returns filed by M&T or any of its subsidiaries. Information about amounts accrued for uncertain tax positions and a reconciliation of income tax expense to the amount computed by applying the statutory federal income tax rate to pre-tax income is provided in note 13 of Notes to Financial Statements.
 
Income
Taxes






The provision for income taxes was $184 million in 2008,
compared with $309 million in 2007 and $392 million in
2006. The effective tax rates were 24.9%, 32.1% and 31.9% in
2008, 2007 and 2006, respectively. The significant decline in
the Company’s effective tax rate from 2007 to 2008 reflects
the resolution in 2008 of previously uncertain tax positions
related to the Company’s activities in various
jurisdictions during the years
1999-2007
that allowed the Company to reduce its accrual for income taxes
in the third quarter of 2008 by $40 million. Exclusive of
the impact of the $40 million credit to income taxes, the
effective tax rate in 2008 was 30.3%.





The effective tax rate is impacted by the level of income earned
that is exempt from tax relative to the overall level of pre-tax
income and by the level of income allocated to the various state
and local jurisdictions where the Company operates, because tax
rates differ among those jurisdictions. Although




69










Table of Contents






 



the other-than-temporary impairment charges during 2008 and 2007
are fully deductible for purposes of computing income tax
expense, those charges had an impact on the effective tax rate
because they significantly lowered pre-tax income relative to
the amounts of tax-exempt income and other permanent differences
that impact the effective tax rate. Excluding the impact of the
(i) other-than-temporary impairment charges from pre-tax
income and income tax expense in 2008 and 2007 and (ii) the
$40 million credit to income tax expense in 2008 resulting
from the resolution of previously unrecognized tax benefits, the
Company’s effective tax rates for 2008 and 2007 would have
been 32.0% and 32.9%, respectively.





The Company’s effective tax rate in future periods will
also be affected by the results of operations allocated to the
various tax jurisdictions within which the Company operates, any
change in income tax regulations within those jurisdictions, or
interpretations of income tax regulations that differ from the
Company’s interpretations by any of various tax authorities
that may examine tax returns filed by M&T or any of its
subsidiaries. Information about amounts accrued for uncertain
tax positions and a reconciliation of income tax expense to the
amount computed by applying the statutory federal income tax
rate to pre-tax income is provided in note 13 of Notes to
Financial Statements.


 




Income
Taxes






The provision for income taxes was $184 million in 2008,
compared with $309 million in 2007 and $392 million in
2006. The effective tax rates were 24.9%, 32.1% and 31.9% in
2008, 2007 and 2006, respectively. The significant decline in
the Company’s effective tax rate from 2007 to 2008 reflects
the resolution in 2008 of previously uncertain tax positions
related to the Company’s activities in various
jurisdictions during the years
1999-2007
that allowed the Company to reduce its accrual for income taxes
in the third quarter of 2008 by $40 million. Exclusive of
the impact of the $40 million credit to income taxes, the
effective tax rate in 2008 was 30.3%.





The effective tax rate is impacted by the level of income earned
that is exempt from tax relative to the overall level of pre-tax
income and by the level of income allocated to the various state
and local jurisdictions where the Company operates, because tax
rates differ among those jurisdictions. Although




69










Table of Contents






 



the other-than-temporary impairment charges during 2008 and 2007
are fully deductible for purposes of computing income tax
expense, those charges had an impact on the effective tax rate
because they significantly lowered pre-tax income relative to
the amounts of tax-exempt income and other permanent differences
that impact the effective tax rate. Excluding the impact of the
(i) other-than-temporary impairment charges from pre-tax
income and income tax expense in 2008 and 2007 and (ii) the
$40 million credit to income tax expense in 2008 resulting
from the resolution of previously unrecognized tax benefits, the
Company’s effective tax rates for 2008 and 2007 would have
been 32.0% and 32.9%, respectively.





The Company’s effective tax rate in future periods will
also be affected by the results of operations allocated to the
various tax jurisdictions within which the Company operates, any
change in income tax regulations within those jurisdictions, or
interpretations of income tax regulations that differ from the
Company’s interpretations by any of various tax authorities
that may examine tax returns filed by M&T or any of its
subsidiaries. Information about amounts accrued for uncertain
tax positions and a reconciliation of income tax expense to the
amount computed by applying the statutory federal income tax
rate to pre-tax income is provided in note 13 of Notes to
Financial Statements.


 




Income
Taxes






The provision for income taxes was $184 million in 2008,
compared with $309 million in 2007 and $392 million in
2006. The effective tax rates were 24.9%, 32.1% and 31.9% in
2008, 2007 and 2006, respectively. The significant decline in
the Company’s effective tax rate from 2007 to 2008 reflects
the resolution in 2008 of previously uncertain tax positions
related to the Company’s activities in various
jurisdictions during the years
1999-2007
that allowed the Company to reduce its accrual for income taxes
in the third quarter of 2008 by $40 million. Exclusive of
the impact of the $40 million credit to income taxes, the
effective tax rate in 2008 was 30.3%.





The effective tax rate is impacted by the level of income earned
that is exempt from tax relative to the overall level of pre-tax
income and by the level of income allocated to the various state
and local jurisdictions where the Company operates, because tax
rates differ among those jurisdictions. Although




69










Table of Contents






 



the other-than-temporary impairment charges during 2008 and 2007
are fully deductible for purposes of computing income tax
expense, those charges had an impact on the effective tax rate
because they significantly lowered pre-tax income relative to
the amounts of tax-exempt income and other permanent differences
that impact the effective tax rate. Excluding the impact of the
(i) other-than-temporary impairment charges from pre-tax
income and income tax expense in 2008 and 2007 and (ii) the
$40 million credit to income tax expense in 2008 resulting
from the resolution of previously unrecognized tax benefits, the
Company’s effective tax rates for 2008 and 2007 would have
been 32.0% and 32.9%, respectively.





The Company’s effective tax rate in future periods will
also be affected by the results of operations allocated to the
various tax jurisdictions within which the Company operates, any
change in income tax regulations within those jurisdictions, or
interpretations of income tax regulations that differ from the
Company’s interpretations by any of various tax authorities
that may examine tax returns filed by M&T or any of its
subsidiaries. Information about amounts accrued for uncertain
tax positions and a reconciliation of income tax expense to the
amount computed by applying the statutory federal income tax
rate to pre-tax income is provided in note 13 of Notes to
Financial Statements.


 




Income taxes
Deferred tax assets and liabilities are recognized for the future tax effects attributable to differences between the financial statement value of existing assets and liabilities and their respective tax bases and carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates and laws.
Effective January 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes.” FIN No. 48 prescribes the accounting method to be applied to measure uncertainty in income taxes recognized under SFAS No. 109, “Accounting for Income Taxes.” FIN No. 48 established a recognition threshold and measurement attribute for the financial statement recognition and measurement of an uncertain tax position taken or expected to be taken in a tax return. The evaluation of an uncertain tax position in accordance with FIN No. 48 is a two-step process. The first step is recognition, which requires a determination whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is measurement. Under the measurement step, a tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The adoption of FIN No. 48 did not result in any change to the Company’s liability for uncertain tax positions as of January 1, 2007. Information related to the application of FIN No. 48 is provided in note 13.
 
Income taxes
Deferred tax assets and liabilities are recognized for the future tax effects attributable to differences between the financial statement value of existing assets and liabilities and their respective tax bases and carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates and laws.
Effective January 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes.” FIN No. 48 prescribes the accounting method to be applied to measure uncertainty in income taxes recognized under SFAS No. 109, “Accounting for Income Taxes.” FIN No. 48 established a recognition threshold and measurement attribute for the financial statement recognition and measurement of an uncertain tax position taken or expected to be taken in a tax return. The evaluation of an uncertain tax position in accordance with FIN No. 48 is a two-step process. The first step is recognition, which requires a determination whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is measurement. Under the measurement step, a tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The adoption of FIN No. 48 did not result in any change to the Company’s liability for uncertain tax positions as of January 1, 2007. Information related to the application of FIN No. 48 is provided in note 13.
 
Income
taxes






Deferred tax assets and liabilities are recognized for the
future tax effects attributable to differences between the
financial statement value of existing assets and liabilities and
their respective tax bases and carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates and
laws.





Effective January 1, 2007, the Company adopted Financial
Accounting Standards Board Interpretation (“FIN”)
No. 48, “Accounting for Uncertainty in Income
Taxes.” FIN No. 48 prescribes the accounting
method to be applied to measure uncertainty in income taxes
recognized under SFAS No. 109, “Accounting for
Income Taxes.” FIN No. 48 established a
recognition threshold and measurement attribute for the
financial statement recognition and measurement of an uncertain
tax position taken or expected to be taken in a tax return. The
evaluation of an uncertain tax position in accordance with
FIN No. 48 is a two-step process. The first step is
recognition, which requires a determination whether it is more
likely than not that a tax position will be sustained upon
examination, including resolution of any related appeals or
litigation processes, based on the technical merits of the
position. The second step is measurement. Under the measurement
step, a tax position that meets the more-likely-than-not
recognition threshold is measured at the largest amount of
benefit that is greater than fifty percent likely of being
realized upon ultimate settlement. Tax positions that previously
failed to meet the more-likely-than-not recognition threshold
should be recognized in the first subsequent financial reporting
period in which that threshold is met. Previously recognized tax
positions that no longer meet the more-likely-than-not
recognition threshold should be derecognized in the first
subsequent financial reporting period in which that threshold is
no longer met. The adoption of FIN No. 48 did not
result in any change to the Company’s liability for
uncertain tax positions as of January 1, 2007. Information
related to the application of FIN No. 48 is provided
in note 13.


 




Income
taxes






Deferred tax assets and liabilities are recognized for the
future tax effects attributable to differences between the
financial statement value of existing assets and liabilities and
their respective tax bases and carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates and
laws.





Effective January 1, 2007, the Company adopted Financial
Accounting Standards Board Interpretation (“FIN”)
No. 48, “Accounting for Uncertainty in Income
Taxes.” FIN No. 48 prescribes the accounting
method to be applied to measure uncertainty in income taxes
recognized under SFAS No. 109, “Accounting for
Income Taxes.” FIN No. 48 established a
recognition threshold and measurement attribute for the
financial statement recognition and measurement of an uncertain
tax position taken or expected to be taken in a tax return. The
evaluation of an uncertain tax position in accordance with
FIN No. 48 is a two-step process. The first step is
recognition, which requires a determination whether it is more
likely than not that a tax position will be sustained upon
examination, including resolution of any related appeals or
litigation processes, based on the technical merits of the
position. The second step is measurement. Under the measurement
step, a tax position that meets the more-likely-than-not
recognition threshold is measured at the largest amount of
benefit that is greater than fifty percent likely of being
realized upon ultimate settlement. Tax positions that previously
failed to meet the more-likely-than-not recognition threshold
should be recognized in the first subsequent financial reporting
period in which that threshold is met. Previously recognized tax
positions that no longer meet the more-likely-than-not
recognition threshold should be derecognized in the first
subsequent financial reporting period in which that threshold is
no longer met. The adoption of FIN No. 48 did not
result in any change to the Company’s liability for
uncertain tax positions as of January 1, 2007. Information
related to the application of FIN No. 48 is provided
in note 13.


 




Income
taxes






Deferred tax assets and liabilities are recognized for the
future tax effects attributable to differences between the
financial statement value of existing assets and liabilities and
their respective tax bases and carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates and
laws.





Effective January 1, 2007, the Company adopted Financial
Accounting Standards Board Interpretation (“FIN”)
No. 48, “Accounting for Uncertainty in Income
Taxes.” FIN No. 48 prescribes the accounting
method to be applied to measure uncertainty in income taxes
recognized under SFAS No. 109, “Accounting for
Income Taxes.” FIN No. 48 established a
recognition threshold and measurement attribute for the
financial statement recognition and measurement of an uncertain
tax position taken or expected to be taken in a tax return. The
evaluation of an uncertain tax position in accordance with
FIN No. 48 is a two-step process. The first step is
recognition, which requires a determination whether it is more
likely than not that a tax position will be sustained upon
examination, including resolution of any related appeals or
litigation processes, based on the technical merits of the
position. The second step is measurement. Under the measurement
step, a tax position that meets the more-likely-than-not
recognition threshold is measured at the largest amount of
benefit that is greater than fifty percent likely of being
realized upon ultimate settlement. Tax positions that previously
failed to meet the more-likely-than-not recognition threshold
should be recognized in the first subsequent financial reporting
period in which that threshold is met. Previously recognized tax
positions that no longer meet the more-likely-than-not
recognition threshold should be derecognized in the first
subsequent financial reporting period in which that threshold is
no longer met. The adoption of FIN No. 48 did not
result in any change to the Company’s liability for
uncertain tax positions as of January 1, 2007. Information
related to the application of FIN No. 48 is provided
in note 13.


 




These excerpts taken from the MTB 10-K filed Feb 21, 2008.
Income taxes
Deferred tax assets and liabilities are recognized for the future tax effects attributable to differences between the financial statement value of existing assets and liabilities and their respective tax bases and carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates and laws.
Effective January 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes.” FIN No. 48 prescribes the accounting method to be applied to measure uncertainty in income taxes recognized under SFAS No. 109, “Accounting for Income Taxes.” FIN No. 48 established a recognition threshold and measurement attribute for the financial statement recognition and measurement of an uncertain tax position taken or expected to be taken in a tax return. The evaluation of an uncertain tax position in accordance with FIN No. 48 is a two-step process. The first step is recognition, which requires a determination whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is measurement. Under the measurement step, a tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The adoption of FIN No. 48 did not result in any change to the Company’s liability for uncertain tax positions as of January 1, 2007. Information related to the adoption of FIN No. 48 is provided in note 12.
 
Income
taxes






Deferred tax assets and liabilities are recognized for the
future tax effects attributable to differences between the
financial statement value of existing assets and liabilities and
their respective tax bases and carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates and
laws.





Effective January 1, 2007, the Company adopted Financial
Accounting Standards Board Interpretation (“FIN”)
No. 48, “Accounting for Uncertainty in Income
Taxes.” FIN No. 48 prescribes the accounting
method to be applied to measure uncertainty in income taxes
recognized under SFAS No. 109, “Accounting for
Income Taxes.” FIN No. 48 established a
recognition threshold and measurement attribute for the
financial statement recognition and measurement of an uncertain
tax position taken or expected to be taken in a tax return. The
evaluation of an uncertain tax position in accordance with
FIN No. 48 is a two-step process. The first step is
recognition, which requires a determination whether it is more
likely than not that a tax position will be sustained upon
examination, including resolution of any related appeals or
litigation processes, based on the technical merits of the
position. The second step is measurement. Under the measurement
step, a tax position that meets the more-likely-than-not
recognition threshold is measured at the largest amount of
benefit that is greater than fifty percent likely of being
realized upon ultimate settlement. Tax positions that previously
failed to meet the more-likely-than-not recognition threshold
should be recognized in the first subsequent financial reporting
period in which that threshold is met. Previously recognized tax
positions that no longer meet the more-likely-than-not
recognition threshold should be derecognized in the first
subsequent financial reporting period in which that threshold is
no longer met. The adoption of FIN No. 48 did not
result in any change to the Company’s liability for
uncertain tax positions as of January 1, 2007. Information
related to the adoption of FIN No. 48 is provided in
note 12.


 




This excerpt taken from the MTB 10-K filed Feb 23, 2007.
Income taxes
Deferred tax assets and liabilities are recognized for the future tax effects attributable to differences between the financial statement value of existing assets and liabilities and their respective tax bases and carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates and laws.
 
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