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Income Taxes
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3 Months Ended |
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Mar. 31, 2013
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| Income Tax Disclosure [Abstract] | |
| Income Taxes |
Income Taxes
The Company files a consolidated federal income tax return and certain combined state and local income tax returns with its subsidiaries. The Company's current tax year ends on September 30th. The Company intends to change its tax year to a year ending on December 31st.
Income tax expense was $523 and $608 for the three months ended March 31, 2013 and 2012, respectively. The primary component of income tax expense was the tax effect of goodwill, which is amortized for income tax purposes, of $295 and $488 for the three months ended March 31, 2013 and 2012, respectively. The remainder of the tax provision principally represents state and local income taxes for the 2013 and 2012 periods presented. The tax rate for the periods presented represents the actual effective tax rate for such periods, which the Company believes represents the best estimate of the annual effective tax rate.
The effective tax rate differs from the statutory income tax rate for the 2013 period primarily due to a tax provision related to amortization of goodwill for tax purposes and the change in the valuation allowance against the net deferred tax asset. The effective tax rate differs from the statutory income tax rate for the 2012 period primarily as a result of the change in fair value of contingent consideration not subject to income tax and the increase in the valuation allowance against the net deferred tax asset (without regard to deferred tax liabilities related to indefinite-lived intangibles) attributable to the pre-tax loss as adjusted for permanent differences.
The Internal Revenue Service is conducting an audit of the Company's U.S. federal income tax return for the year ended September 30, 2011.
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