The Tax Cuts and Jobs Act of (the “New Tax Legislation”) was enacted on which significantly revised the U.S. corporate income tax code by, among other things, lowering federal corporate income tax rates, implementing a modified territorial tax system and imposing a repatriation tax ("transition tax") on deemed repatriated cumulative earnings of foreign subsidiaries which will be paid over years. In addition, new taxes were imposed related to foreign income, including a tax on global intangible low-taxed income (“GILTI”) as well as a limitation on the deduction for business interest expense (“Section (j)"). GILTI is the excess of the shareholder’s net controlled foreign corporations ("CFC") net tested income over the net deemed tangible income.  The Section (j) limitation does allow the amount of deductible interest to exceed the sum of the taxpayer's business interest income, of the taxpayer’s adjusted taxable income, and the taxpayer’s floor plan financing interest expense for the year. We have included in our calculation of our effective tax rate the estimated impact of GILTI and Section (j) which were effective for us beginning in fiscal year We have elected to account for the tax on GILTI as a period cost and, therefore, do record deferred taxes related to GILTI on our foreign subsidiaries.

 

Our effective income tax rate on operations for the -month period ended was compared to a rate of in the same period of the prior year and an effective rate of for fiscal year

 

We benefit from having income in foreign jurisdictions that are either exempt from income taxes or have tax rates that are lower than those in the United States. However, changes in the mix of U.S. taxable income compared to profits in tax-free or lower-tax jurisdictions can have a significant impact on our overall effective tax rate.  In addition, the future impact of the New Tax Legislation differ from historical amounts, possibly materially, due to, among other things, changes in interpretations and assumptions made regarding the New Tax Legislation, guidance that be issued, and actions we take as a result of the New Tax Legislation.