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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income before provision for income taxes was as follows:


	Year Ended December 31,
	2020		2019		2018
	(in thousands)
United States	$	2,789,064	$	1,719,326	$	845,402
Foreign	410,285		342,905		381,056
Income before income taxes	$	3,199,349	$	2,062,231	$	1,226,458

Components of Provision for Income Taxes

The components of provision for income taxes for all periods presented were as follows:


	Year Ended December 31,
	2020		2019		2018
	(in thousands)
Current tax provision:
Federal	$	24,221	$	21,498	$	(22,176)
State	65,821		45,228		(10,234)
Foreign	277,846		223,328		133,146
Total current	367,888		290,054		100,736
Deferred tax provision:
Federal	(57,765)		(28,003)		(37,396)
State	164,685		(54,507)		(52,391)
Foreign	(36,854)		(12,229)		4,267
Total deferred	70,066		(94,739)		(85,520)
Provision for income taxes	$	437,954	$	195,315	$	15,216

Reconciliation of Provision for Income Taxes

A reconciliation of the provision for income taxes, with the amount computed by applying the statutory Federal income tax rate to income before income taxes is as follows:


	Year Ended December 31,
	2020			2019			2018
	(in thousands)
Expected tax expense at U.S. Federal statutory rates	$	671,864		$	433,059		$	257,556
State income taxes, net of Federal income tax effect	65,808			47,909			33,611
Foreign earnings at other than U.S. rates	12,212			56,969			63,519
Federal and California R&D tax credits	(113,882)			(134,523)			(140,749)
Valuation allowance on California R&D tax credits	183,283			—			—
Excess tax benefits on stock-based compensation	(339,436)			(148,693)			(191,323)
Impact of the Tax Cuts and Jobs Act of 2017
Rate Change / Transition Tax	—			—			(71,516)
Tax effects of the Tax Cuts and Jobs Act	(87,194)			(127,534)			43,099
Global corporate structure simplification	—			35,939			—
Nondeductible Officers Compensation	30,351			24,111			14,377
Other	14,948			8,078			6,642
Provision for income taxes	$	437,954		$	195,315		$	15,216
Effective Tax Rate	14		%	9		%	1		%

Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities were as follows:


	As of December 31,
	2020		2019
	(in thousands)
Deferred tax assets:
Stock-based compensation	$	296,646	$	258,376
Federal and California tax R&D credits	513,413		408,715
Foreign tax credits	—		137,818
Accruals and reserves	74,239		42,450
Operating leases	436,838		349,208
Foreign Net Operating Losses	29,894		411
Unrealized Gain/Loss	114,884		5,477
Other	2,543		622
Gross deferred tax assets	1,468,457		1,203,077
Depreciation & amortization	(229,142)		(80,921)
Operating leases	(400,380)		(329,168)
Gross deferred tax liabilities	(629,522)		(410,089)
Valuation allowance	(249,844)		(134,782)
Net deferred tax assets	$	589,091	$	658,206

Summary of Changes in Unrecognized Tax Benefits

The aggregate changes in the Company’s total gross amount of unrecognized tax benefits are summarized as follows (in thousands):


Balances as of December 31, 2018	$	47,534
Increases related to tax positions taken during prior periods	925
Decreases related to tax positions taken during prior periods	(417)
Increases related to tax positions taken during the current period	18,826
Decreases related to expiration of statute of limitations	(100)
Balances as of December 31, 2019	66,768
Increases related to tax positions taken during prior periods	11,943
Decreases related to tax positions taken during prior periods	(3,697)
Increases related to tax positions taken during the current period	65,110
Decreases related to expiration of statute of limitations	—


Balances as of December 31, 2020	$	140,124