XML 33 R18.htm IDEA: XBRL DOCUMENT v3.22.4
Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before provision for income taxes was as follows:
 Year Ended December 31,
 202220212020
 (in thousands)
United States$4,690,442 $5,365,547 $2,789,064 
Foreign573,487 474,556 410,285 
Income before income taxes$5,263,929 $5,840,103 $3,199,349 
The components of provision for income taxes for all periods presented were as follows:
 
 Year Ended December 31,
 202220212020
 (in thousands)
Current tax provision:
Federal$109,910 $57,526 $24,221 
State119,795 109,641 65,821 
Foreign676,827 357,189 277,846 
Total current906,532 524,356 367,888 
Deferred tax provision:
Federal(52,434)188,937 (57,765)
State(30,691)(2,700)164,685 
Foreign(51,402)13,282 (36,854)
Total deferred(134,527)199,519 70,066 
Provision for income taxes$772,005 $723,875 $437,954 
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,
 202220212020
 (in thousands)
Expected tax expense at U.S. Federal statutory rates$1,105,428 $1,226,422 $671,864 
State income taxes, net of Federal income tax effect92,084 111,400 65,808 
Foreign earnings at other than U.S. rates112,628 (23,963)12,212 
Federal and California R&D tax credits(146,615)(82,909)(113,882)
Valuation allowance on California R&D tax credits— — 183,283 
Excess tax benefits on stock-based compensation(75,211)(290,899)(339,436)
Tax effects of the Tax Cuts and Jobs Act(368,976)(254,763)(87,194)
Nondeductible Officers Compensation33,836 26,874 30,351 
Other18,831 11,713 14,948 
Provision for income taxes$772,005 $723,875 $437,954 
Effective Tax Rate15 %12 %14 %
The components of deferred tax assets and liabilities were as follows:
 
 As of December 31,
 20222021
 (in thousands)
Deferred tax assets:
Stock-based compensation$443,456 $351,238 
Federal and California tax R&D credits342,589 484,793 
Foreign tax credits11,899 2,045 
Capitalized Research Expenses323,998 — 
Accruals and reserves119,732 165,214 
Operating leases551,418 570,830 
Foreign Net Operating Losses20,092 8,043 
Unrealized Gain/Loss(47,283)13,772 
Other2,234 5,420 
Gross deferred tax assets1,768,135 1,601,355 
Depreciation & amortization(456,717)(388,115)
Operating leases(473,928)(506,403)
       Acquisitions(232,607)(240,334)
Gross deferred tax liabilities(1,163,252)(1,134,852)
Valuation allowance(343,342)(318,408)
Net deferred tax assets$261,541 $148,095 
All deferred tax assets are classified as “Other non-current assets” on the Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021. In evaluating its ability to realize the net deferred tax assets, the Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. As of December 31, 2022, the valuation allowance of $343 million was related to the California R&D credits and certain foreign tax attributes that the Company does not expect to realize.
As of December 31, 2022, the Company's California R&D tax credit carryforwards for tax return purposes was $504 million.
The unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year are classified as “Other non-current liabilities” and a reduction of deferred tax assets which is classified as "Other non-current assets" in the Consolidated Balance Sheets. As of December 31, 2022, the total amount of gross unrecognized tax benefits was $227 million, of which $155 million, if recognized, would favorably impact the Company’s effective tax rate. As of December 31, 2021, the total amount of gross unrecognized tax benefits was $203 million, of which $136 million, if recognized, would favorably impact the Company’s effective tax rate. 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, 2020$140,124 
Increases related to tax positions taken during prior periods 27,116 
Decreases related to tax positions taken during prior periods— 
Increases related to tax positions taken during the current period35,317 
Decreases related to expiration of statute of limitations— 
Balances as of December 31, 2021202,557 
Increases related to tax positions taken during prior periods — 
Decreases related to tax positions taken during prior periods (2,445)
Increases related to tax positions taken during the current period26,865 
Decreases related to expiration of statute of limitations— 
Balances as of December 31, 2022$226,977 
The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes and in “Other non-current liabilities” in the Consolidated Balance Sheets. Interest and penalties included in the Company's provision for income taxes were not material in all the periods presented.
The Company files U.S. Federal, state and foreign tax returns. The Company is currently under examination by the IRS for years 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. While the Company is in various stages of inquiries and examinations for some state and federal taxing authorities, we believe that our tax positions will more likely than not be sustained. Nonetheless, it is possible that future obligations related to these matters could arise.
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.