Company: SBH
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001193125-25-280122
Chunk: 75

Company: Sally Beauty Holdings, Inc.
Filing Date: 2025-11-13
Form: 10-K
Item: Item 6
Chunk 75
---
 $
         8,398

       If recognized, these positions would affect our effective tax rate.On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) enacted comprehensive amendments to the Internal Revenue Code of 1986. Among other things, the TCJA provided for a deemed repatriation of undistributed foreign earnings by U.S. taxpayers giving rise to a one-time transition tax on those earnings (“Repatriation Tax”). The U.S. Treasury Department issued final regulations (“Regulations”) addressing certain aspects of how the Repatriation Tax is calculated. In our view, certain guidance included in the Regulations is inconsistent with our interpretation of the statutory language contained in the TCJA. In fiscal year 2023, we remitted $4.3 million in tax and interest to the IRS. Income tax expense of $2.7 million was recorded in fiscal year 2023 related to the payments. Previously, $1.6 million had been reserved for this issue. We maintain our tax positions are fully supportable.We recognize interest and penalties, accrued in connection with unrecognized tax benefits, in provision for income taxes. Accrued interest and penalties, in the aggregate, were $0.9 million and $0.7 million at September 30, 2025 and 2024, respectively.Because existing tax positions will continue to generate increased liabilities for unrecognized tax benefits over the next 12 months, and the fact that from time to time our tax returns are routinely under audit by various taxing 

F-28

Sally Beauty Holdings, Inc. and SubsidiariesNotes to Consolidated Financial StatementsFiscal Years ended September 30, 2025, 2024, and 2023 

authorities, it is reasonably possible that the amount of unrecognized tax benefits will change during the next 12 months. An estimate of the amount of such change, or a range thereof, cannot reasonably be made at this time. However, we do not expect the change, if any, to have a material effect on our consolidated financial condition or results of operations within the next 12 months.Our consolidated federal income tax return for the fiscal year 2024 is currently under IRS examination. Our statute of limitations remains open for the fiscal year ended September 30, 2022, forward. Our U.S. state income tax returns are impacted by various statutes of limitations and are generally open for the fiscal year ended September 30, 2022, and future years. Our foreign income tax returns