Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

	Three Months Ended
	March 31, 2022			March 31, 2021
	(in thousands, except percentages)
Provision for income taxes	$	382,245		$	327,787
Effective tax rate	19		%	16		%

The effective tax rate for the three months ended March 31, 2022 differed from the Federal statutory rate primarily due to an increase in foreign taxes, offset by the impact of international provisions of the Tax Cuts and Jobs Act, and the recognition of excess tax benefits of stock-based compensation. The effective tax rate for the three months ended March 31, 2021 differed from the Federal statutory rate primarily due to the impact of international provisions of the Tax Cuts and Jobs Act and recognition of excess tax benefits of stock-based compensation.

The increase in the effective tax rate for the three months ended March 31, 2022, as compared to the same period in 2021 was primarily due to an increase in foreign taxes and a reduction to excess tax benefits of stock-based compensation. For the three months ended March 31, 2022, the Company recognized a discrete tax benefit related to the excess tax benefits from stock-based compensation of $25 million, compared to the three months ended March 31, 2021 of $47 million.

Gross unrecognized tax benefits were $215 million and $203 million as of March 31, 2022 and December 31, 2021, respectively. The gross unrecognized tax benefits as of March 31, 2022, if recognized by the Company, will result in a reduction of approximately $143 million to the provision for income taxes thereby favorably impacting the Company’s effective tax rate.

The Company files U.S. Federal, state and foreign tax returns. The Company is currently under examination by the IRS for 2016 through 2018 and is subject to examination for 2019 through 2021. The foreign and state tax returns for years 2015 through 2021 are subject to examination by various states and foreign jurisdictions.

Given the potential outcome of the current examinations, as well as the impact of the current examinations on the potential expiration of the statute of limitations, it is reasonably possible that the balance of unrecognized tax benefits could significantly change within the next twelve months. However, an estimate of the range of reasonably possible adjustments cannot be made at this time.