(10) Income Taxes

We are subject to taxation in the U.S. federal jurisdiction, as well as various U.S. state and foreign jurisdictions. We have identified our U.S. federal tax return as our “major” tax jurisdiction. As of June 30, 2017, we are no longer subject to examination by U.S. federal tax authorities for years prior to 2013, to examination for any U.S. state taxing authority prior to 2011, or to examination for any foreign jurisdictions prior to 2013.  All subsequent periods remain open to examination.  Our effective income tax rate decreased to 34.3% for the six months ended June 30, 2017, compared to 36.6% for the prior-year period.  This decrease in the effective tax rate was primarily due to stock compensation related items recorded discretely in the prior year period.

Our policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. Penalties and associated interest costs, if any, are recorded in rental, selling and general expenses in our Condensed Consolidated Statements of Income.