Provision (Benefit) for Income Taxes

3 Months Ended

Mar. 31, 2018

Income Tax Disclosure [Abstract]

Provision (Benefit) for Income Taxes [Text Block]

Note 6 – Provision (Benefit) for Income Taxes

The Provision (benefit) for income taxes includes:

	Three Months Ended   March 31,
	2018			2017
	(Millions)
Current:
Federal	$	(19	)	$	3
State	1			6
	(18		)	9
Deferred:
Federal	64			15
State	9			13
	73			28
Provision (benefit) for income taxes	$	55		$	37

The effective income tax rate for the total provision for the three months ended March 31, 2018, is less than the federal statutory rate. This is primarily due to the impact of the allocation of income to nontaxable noncontrolling interests, partially offset by the effect of state income taxes.

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. The sale of the Geismar olefins facility in 2017 generated capital gains sufficient to offset the capital loss carryover, thereby allowing us to reverse the valuation allowance in full.

On December 22, 2017, Tax Reform was enacted. Under the guidance provided by Securities and Exchange Commission Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, we recorded provisional adjustments related to the impact of Tax Reform in the fourth quarter of 2017. We consider all amounts recorded related to Tax Reform to be reasonable estimates. The amounts recorded continue to be provisional for the reasons disclosed in our Annual Report on Form 10-K filed February 22, 2018, as our interpretation, assessment, and presentation of the impact of the tax law change may be further clarified with additional guidance from regulatory, tax, and accounting authorities. We are continuing to gather additional information to determine the final impact and should additional guidance be provided by these authorities or other sources, we will review the provisional amounts and adjust as appropriate.

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.