Provision (Benefit) for Income Taxes

3 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

Provision (Benefit) for Income Taxes [Text Block]

Note 5 – Provision (Benefit) for Income Taxes

The Provision (benefit) for income taxes includes:

	Three Months Ended   March 31,
	2017		2016
	(Millions)
Current:
Federal	$	3	$	—
State	6		—
	9		—
Deferred:
Federal	15		(5		)
State	13		7
	28		2
Provision (benefit) for income taxes	$	37	$	2

The effective income tax rate for the total provision for the three months ended March 31, 2017, is less than the federal statutory rate primarily due to releasing a $127 million valuation allowance on a capital loss carryover and the impact of nontaxable noncontrolling interests, partially offset by the effect of state income taxes. In 2016, we recorded a valuation allowance on a capital loss that was incurred with the sale of our Canadian operations. The pending sale of the Geismar olefins facility (see Note 1 – General, Description of Business, and Basis of Presentation ) is expected to generate capital gains sufficient to offset the capital loss carryover, thereby allowing us to reverse the valuation allowance in full.

The effective income tax rate for the total provision for the three months ended March 31, 2016, is unfavorable relative to the federal statutory rate primarily due to the effect of state income taxes and the impact of nontaxable noncontrolling interests, partially offset by taxes on foreign operations.

During the next 12 months, we do not expect ultimate resolution of any unrecognized tax benefit associated with domestic or international matters to have a material impact on our unrecognized tax benefit position.