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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income before provision for income taxes was as follows:


	Year Ended December 31,
	2022		2021		2020
	(in thousands)
United States	$	4,690,442	$	5,365,547	$	2,789,064
Foreign	573,487		474,556		410,285
Income before income taxes	$	5,263,929	$	5,840,103	$	3,199,349

Components of Provision for Income Taxes

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


	Year Ended December 31,
	2022		2021		2020
	(in thousands)
Current tax provision:
Federal	$	109,910	$	57,526	$	24,221
State	119,795		109,641		65,821
Foreign	676,827		357,189		277,846
Total current	906,532		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

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,
	2022			2021			2020
	(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 effect	92,084			111,400			65,808
Foreign earnings at other than U.S. rates	112,628			(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 Compensation	33,836			26,874			30,351
Other	18,831			11,713			14,948
Provision for income taxes	$	772,005		$	723,875		$	437,954
Effective Tax Rate	15		%	12		%	14		%

Deferred Tax Assets and Liabilities

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


	As of December 31,
	2022		2021
	(in thousands)
Deferred tax assets:
Stock-based compensation	$	443,456	$	351,238
Federal and California tax R&D credits	342,589		484,793
Foreign tax credits	11,899		2,045
Capitalized Research Expenses	323,998		—
Accruals and reserves	119,732		165,214
Operating leases	551,418		570,830
Foreign Net Operating Losses	20,092		8,043
Unrealized Gain/Loss	(47,283)		13,772
Other	2,234		5,420
Gross deferred tax assets	1,768,135		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

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, 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 period	35,317
Decreases related to expiration of statute of limitations	—
Balances as of December 31, 2021	202,557
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 period	26,865
Decreases related to expiration of statute of limitations	—


Balances as of December 31, 2022	$	226,977