Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

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Income Taxes
9 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company computes its interim provision for income taxes by applying the estimated annual effective tax rate to income (loss) from operations and adjusts the provision for discrete tax items occurring in the period. The Company’s effective tax rate for the three months ended December 31, 2020 was 21% compared to negative 8% for the three months ended December 31, 2019. The Company’s effective tax rate for the nine months ended December 31, 2020 was 22% compared to negative 112% for the nine months ending December 31, 2019. The effective tax rate for both the three and nine months ended December 31, 2019 differed substantially from the U.S. statutory rate due to significant taxes on the Company’s reorganization transactions.
Based on the Company’s review of both positive and negative evidence regarding the realizability of deferred tax assets at December 31, 2020, a valuation allowance continues to be recorded against certain deferred tax assets based upon the conclusion that it was more likely than not that these assets would not be realized. The valuation allowance at December 31, 2020 relates primarily to share-based compensation, capitalized development costs, and foreign tax credits.
Other Matters
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted. The Company previously reviewed the CARES Act in the U.S. and determined that there was no significant impact on the Company’s tax provision. The Company continues to analyze these legislative developments and believes they have not had a material impact on the Company’s provision for income taxes for the three and nine months ended December 31, 2020.
The Company files its Federal and state income tax returns related to its fiscal year ended March 31, 2020 during the quarter ended March 31, 2021. Given the number of estimates and the size of the original tax, it is possible that changes in these estimates could result in a reduction of the Company’s income tax for the returns filed during the quarter ended March 31, 2021.