Income Taxes |
9 Months Ended | ||||||||||||||||||||||||||||||||
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Jun. 30, 2025 | |||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
| Income Taxes | NOTE J – INCOME TAXES Current fiscal year Ashland’s effective tax rate in any interim period is subject to adjustments related to discrete items and the mix of domestic and foreign operating results. The overall effective tax rate was an expense of 2% and a benefit of 2% for the three and nine months ended June 30, 2025, respectively. The tax rate for the three months ended June 30, 2025 was primarily impacted by jurisdictional income mix, nondeductible goodwill impairment of $706 million and a net $16 million from unfavorable tax discrete items primarily related to return to provision adjustments and changes in uncertain tax positions. The tax rate for the nine months ended June 30, 2025, was impacted by jurisdictional income mix, nondeductible goodwill impairment of $706 million, and a net $23 million from unfavorable tax discrete items primarily related to return to provision adjustments and changes in uncertain tax positions. Prior fiscal year The overall effective tax rate was a benefit of 144% and 467% for the three and nine months ended June 30, 2024, respectively. The tax rate for the three months ended June 30, 2024, was impacted by jurisdictional income mix, as well as a net $104 million from favorable tax discrete items primarily related to the tax impact of the held for sale classification for the Nutraceuticals business. The tax rate for the nine months ended June 30, 2024, was impacted by jurisdictional income mix, as well as net $231 million from favorable tax discrete items primarily related to changes in foreign tax activity and the tax impact of the held for sale classification for the Nutraceuticals business. Unrecognized tax benefits Changes in unrecognized tax benefits are summarized as follows for the nine months ended June 30, 2025.
From a combination of statute expirations and audit settlements in the next twelve months, Ashland expects a decrease in the amount of accrual for uncertain tax positions of between $2 million and $4 million for continuing operations. For the remaining balance as of June 30, 2025, it is reasonably possible that there could be material changes to the amount of uncertain tax positions due to activities of the taxing authorities, settlement of audit issues, reassessment of existing uncertain tax positions or the expiration of applicable statute of limitations; however, Ashland is not able to estimate the impact of these items at this time. On July 4, 2025, “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14” – commonly referred to as the One Big Beautiful Bill Act (OBBBA) – was signed into law. OBBBA includes several changes to the U.S. federal income tax system, including modifications to the deduction for domestic research and development costs, expensing of certain business property, and changes to the limitation on business interest. Ashland is currently evaluating the provisions of OBBBA, including any forthcoming regulatory guidance, on its tax position and financial reporting. Ashland will record any impact, which it does not anticipate to be material to the Condensed Consolidated Financial Statements, in the period of enactment (fourth quarter of fiscal 2025). |
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