RENT » Topics » Income Taxes

These excerpts taken from the RENT 10-K filed Jun 11, 2009.

Income Taxes

Our effective tax rate was 15.6%, 36.7% and 40.0%, respectively, in fiscal 2009, 2008 and 2007. Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes and other adjustments as noted below.

In fiscal 2009, our tax rate was positively affected by the following factors: $0.3 million for federal and state research and experimentation credits, $0.3 million for earnings on investments in tax exempt municipal bonds, $0.3 million for changes in our FIN 48 reserve, which includes $0.8 million of favorable settlements relating to our recently completed federal tax audit offset by an additional reserve of $0.5 million primarily for tax positions taken in prior fiscal years, and $0.8 million for income exempt in foreign jurisdictions.

In fiscal 2008, our tax rate was positively affected by $0.6 million of federal and state research and experimentation credits and negatively affected by a $0.1 million change associated with our adoption of FIN 48.

Income Taxes

Our effective tax rate was 15.6%,
36.7% and 40.0%, respectively, in fiscal 2009, 2008 and 2007. Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes and other adjustments as noted below.

STYLE="margin-top:12px;margin-bottom:0px">In fiscal 2009, our tax rate was positively affected by the following factors: $0.3 million for federal and state research and experimentation credits, $0.3 million for
earnings on investments in tax exempt municipal bonds, $0.3 million for changes in our FIN 48 reserve, which includes $0.8 million of favorable settlements relating to our recently completed federal tax audit offset by an additional reserve of $0.5
million primarily for tax positions taken in prior fiscal years, and $0.8 million for income exempt in foreign jurisdictions.

In fiscal 2008, our tax rate
was positively affected by $0.6 million of federal and state research and experimentation credits and negatively affected by a $0.1 million change associated with our adoption of FIN 48.

FACE="Times New Roman" SIZE="2">Inflation

We believe that the impact of inflation was minimal on our business in fiscal 2009, 2008 and 2007.

Income Taxes

We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.” Under the asset and liability method specified by SFAS No. 109, deferred tax assets and liabilities are determined based on the temporary differences between the financial statement basis and tax basis of assets and liabilities as measured by the enacted tax rates for the years in which the taxes are expected to be paid. We evaluate our deferred tax assets on a regular basis to determine if a valuation allowance is required. To the extent it is determined the recoverability of the deferred tax assets is unlikely, we record a valuation allowance against deferred tax assets. As of both March 31, 2009 and 2008, we had a valuation allowance of $0.1 million recorded against our net operating and capital loss carryforwards in various state and foreign jurisdictions. As of March 31, 2009 and 2008, net deferred tax assets and (liabilities) totaled $(0.6) million and $27,000, respectively.

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), which is an interpretation of FASB Statement No. 109. FIN 48 clarifies the accounting for uncertainty in tax positions and applies to situations where there is uncertainty as to the timing of the deduction, the amount of the deduction, or the validity of the deduction. FIN 48 requires that we adjust our financial statements to reflect only those tax positions that are more-likely-than-not to be sustained on audit, based on the technical merits of the position. As of March 31, 2009 and 2008, the total amount of unrecognized tax benefits was $1.2 million and $2.0 million, respectively, including penalties and interest of $30,000 and $0.3 million, respectively. All unrecognized tax benefits at March 31, 2009 would affect the effective tax rate if recognized.

These excerpts taken from the RENT 10-Q filed Feb 5, 2009.

Note 10. Income Taxes

Our effective tax rate, which was a benefit of 43.5% and a provision of 25.8% in the three and nine-month periods ended December 31, 2008, respectively. The rates included a benefit for: i) the enactment of an extension of the federal Research and Experimentation credit; ii) earnings on investments in tax exempt municipal bonds; and iii) favorable tax return adjustments related to the filing of our fiscal 2008 tax returns.

 

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Our unrecognized tax benefits increased $0.5 million in both the three and nine-month periods ended December 31, 2008 in conjunction with uncertain tax positions related to prior tax filings and uncertain tax positions included in the current year tax computations. Unrecognized tax benefits totaled $2.2 million at December 31, 2008, all of which would reduce our effective tax rate if recognized.

Income Taxes

Our effective tax rate was (43.5)% and 25.8%, respectively, in the three and nine-month periods ended December 31, 2008 and 46.1% and 44.5% in the three and nine-month periods ended December 31, 2007. Our effective tax rate typically differs from the federal statutory tax rate primarily due to state income taxes. In the third quarter of fiscal 2009, our tax rate decreased due to the following factors: the enactment of an extension of the federal Research and Experimentation credit, earnings on investments in tax exempt municipal bonds and favorable tax return adjustments related to the filing of our fiscal 2008 tax returns.

This excerpt taken from the RENT 10-Q filed Nov 5, 2008.

Income Taxes

Our effective tax rate was 43.7% and 44.1% in the six-month periods ended September 30, 2008 and 2007, respectively. Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes.

This excerpt taken from the RENT 10-Q filed Aug 6, 2008.

Income Taxes

Our effective tax rate was 44.0% and 44.3% in the first quarter of fiscal 2009 and 2008, respectively. Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes.

These excerpts taken from the RENT 10-K filed Jun 13, 2008.

Income Taxes

SIZE="2">Our effective tax rate was 36.7%, 40.0% and 36.7%, respectively, in fiscal 2008, 2007 and 2006. Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes. In addition, the 36.7% rate in fiscal
2008 was positively affected by $0.6 million of research and experimentation credits and negatively affected by a $0.1 million change associated with our adoption of FIN 48. The 36.7% effective tax rate in fiscal 2006 benefited from the utilization
of net operating loss carryforwards and capital loss carryforwards, most of which were fully utilized by March 31, 2006, and which previously had been reserved against.

FACE="Times New Roman" SIZE="2">Inflation

We believe that the impact of inflation was minimal on our business in fiscal 2008, 2007 and 2006.

Income Taxes

We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.” Under the asset and liability method specified by SFAS No. 109, deferred tax assets and liabilities are determined based on the temporary differences between the financial statement basis and tax basis of assets and liabilities as measured by the enacted tax rates for the years in which the taxes are expected to be paid. We evaluate our deferred tax assets on a regular basis to determine if a valuation allowance is required. To the extent it is determined the recoverability of the deferred tax assets is unlikely, we record a valuation allowance against deferred tax assets. As of March 31, 2008 and 2007, we had a valuation allowance of $0.1 million recorded against our net operating and capital loss carryforwards in various state and foreign jurisdictions. As of March 31, 2008 and 2007, net deferred tax assets and (liabilities) totaled $27,000 and ($256,000), respectively.

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), which is an interpretation of FASB Statement No. 109. FIN 48 clarifies the accounting for uncertainty in tax positions and applies to situations where there is uncertainty as to the timing of the deduction, the amount of the deduction, or the validity of the deduction. FIN 48 requires that we adjust our financial statements to reflect only those tax positions that are more-likely-than-not to be sustained on audit, based on the technical merits of the position. As of March 31, 2008, the total amount of unrecognized tax benefits was $2.0 million, including penalties and interest of

 

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$0.3 million. All unrecognized tax benefits would affect the effective tax rate if recognized.

This excerpt taken from the RENT 10-Q filed Feb 6, 2008.

Income Taxes

Our effective tax rate was 44.5% and 39.4%, respectively, in the nine-month periods ended December 31, 2007 and 2006. Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes. The increase in rate is also due to changes associated with our adoption of FIN 48. See Note 6: Adoption of Interpretation No. 48 of the Notes to the Condensed Consolidated Financial Statements.

 

This excerpt taken from the RENT 10-Q filed Nov 7, 2007.

Income Taxes

Our effective tax rate was 44.1% and 38.7% in the six-month periods ended September 30, 2007 and 2006, respectively. Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes. The increase in rate is also due to changes associated with our adoption of FIN 48. See Note 6: Adoption of Interpretation No. 48 of the Notes to the Condensed Consolidated Financial Statements.

 

This excerpt taken from the RENT 10-Q filed Aug 9, 2007.

Income Taxes

Our effective tax rate was 44.3% and 41.5% in the first quarter of fiscal 2008 and 2007, respectively.   Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes. The increase in rate is also due to changes associated with our adoption of FIN 48. See Note 5: Adoption of Interpretation No. 48 of the Notes to the Condensed Consolidated Financial Statements.

This excerpt taken from the RENT 10-K filed Jun 13, 2007.

Income Taxes

We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.”  Under the asset and liability method specified by SFAS No. 109, deferred tax assets and liabilities are determined based on the temporary differences between the financial statement basis and tax basis of assets and liabilities as measured by the enacted tax rates for the years in which the taxes are expected to be paid.  We evaluate our deferred tax assets on a regular basis to determine if a valuation allowance is required. To the extent it is determined the recoverability of the deferred tax assets is unlikely, we record a valuation allowance against deferred tax assets. As of March 31, 2007 and 2006, we had a valuation allowance of $0.1 million and $0.6 million, respectively, recorded against our Canadian net operating loss carryforwards and net deferred tax assets (liabilities) totaled $(0.3) million and $0.4 million, respectively.

This excerpt taken from the RENT 10-Q filed Feb 9, 2007.

Income Taxes

Our effective tax rate was 39.5% and 36.5%, respectively, in the nine-month periods ended December 31, 2006 and 2005. Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes. The 36.5% effective rate in the nine-month period ended December 31, 2005 benefited from the utilization of net operating loss carryforwards and capital loss carryforwards, most of which were fully utilized by March 31, 2006.

This excerpt taken from the RENT 10-Q filed Nov 9, 2006.

Income Taxes

Our effective tax rate was 38.7% and 36.5% in the six-month periods ended September 30, 2006 and 2005, respectively. Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes. The 36.5% effective rate in the six-month period ended September 30, 2005 benefited from the utilization of net operating loss carryforwards and capital loss carryforwards, most of which were fully utilized by March 31, 2006.

This excerpt taken from the RENT 10-Q filed Aug 9, 2006.

Income Taxes

Our effective tax rate was 41.5% and 36.5% in the first quarter of fiscal 2007 and 2006, respectively.   Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes. The 36.5% effective rate in the first quarter of fiscal 2006 benefited from the utilization of net operating loss carryforwards and capital loss carryforwards, most of which were fully utilized by March 31, 2006.

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This excerpt taken from the RENT 10-K filed Jun 12, 2006.

Income Taxes

We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.”  Under the asset and liability method specified by SFAS No. 109, deferred tax assets and liabilities are determined based on the temporary differences between the financial statement basis and tax basis of assets and liabilities as measured by the enacted tax rates for the years in which the taxes are expected to be paid. We evaluate our deferred tax assets on a regular basis to determine if a valuation allowance is required. To the extent it is determined the recoverability of the deferred tax assets is unlikely, we record a valuation allowance against deferred tax assets. As of March 31, 2006 and 2005, we had a valuation allowance of $0.6 million and $0.4 million, respectively, recorded against our Canadian net operating loss carryforwards and net deferred tax assets totaled $0.4 million and $1.1 million, respectively.

This excerpt taken from the RENT 10-Q filed Feb 7, 2006.

Income Taxes

 

Our effective tax rate was 36.5% and 38.7%, respectively, in the nine-month periods ended December 31, 2005 and 2004. Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes.

 

This excerpt taken from the RENT 10-Q filed Nov 8, 2005.

Income Taxes

 

Our effective tax rate was 36.5% in both the three and six-month periods ended September 30, 2005 and 2004.  Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes.

 

This excerpt taken from the RENT 10-Q filed Aug 9, 2005.

Income Taxes

 

Our effective tax rate was 36.5% in the first quarter of both fiscal 2006 and 2005.  Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes.

 

This excerpt taken from the RENT 10-K filed Jun 13, 2005.

Income Taxes

We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.”  Under the asset and liability method specified by SFAS No. 109, deferred tax assets and liabilities are determined based on the temporary differences between the financial statement basis and tax basis of assets and liabilities as measured by the enacted tax rates for the years in which the taxes are expected to be paid.  We evaluate our deferred tax assets on a regular basis to determine if a valuation allowance is required.  To the extent it is determined the recoverability of the deferred tax assets is unlikely, we record a valuation allowance against deferred tax assets. As of March 31, 2005 and 2004, we had a valuation allowance of $0.4 million and $0.3 million, respectively, recorded against our Canadian net operating loss carryforwards.

 

This excerpt taken from the RENT 10-Q filed Feb 14, 2005.

Income Taxes

 

Our effective tax rate was 38.7% and 25.0%, respectively, in the nine-month periods ended December 31, 2004 and 2003.  The rate in the nine-month period ended December 31, 2003 was affected by a change in valuation allowance, which is not expected in the current fiscal year. Additionally, the remaining permanent differences are primarily fixed amounts and, as our pretax income has increased in the nine-month period ended December 31, 2004 compared to the nine-month period ended December 31, 2003, these differences have a lower effect on our overall tax rate.

 

Discontinued Operations

 

In January 2004, we were notified by the purchaser of a portion of BlowOut Video’s operations of their intent to default on a note receivable due to us. As such, we provided an approximate $0.2 million reserve for the remaining balance of this note receivable in the three-month period ended December 31, 2003.  This reserve resulted in a reported loss, net of tax benefit, from these discontinued operations of $129,000, or $0.01 per share, in the three-month and nine-month periods ended December 31, 2003.

 

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