Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The following table summarizes our income tax expense for the periods presented (in millions, except for percentages):

	Three Months Ended March 31,
	2023			2022
(Loss) income before income taxes	$	(305)		$	4,229
(Benefit from) provision for income taxes	$	(384)		$	572
Effective tax rate	125.9		%	13.5		%

The effective tax rate for the three months ended March 31, 2023 was higher than the U.S. statutory tax rate, primarily due to international provisions of the Tax Cuts and Jobs Act and research and development credits. The effective tax rate includes a discrete benefit from stock-based compensation, a state deferred tax rate change, and a valuation allowance release on a portion of its state tax attributes. The decrease in income tax expense was primarily due to a decrease in income.

We file U.S. federal income tax returns and income tax returns in various state, local and foreign jurisdictions. We are not currently subject to any tax assessment from an income tax examination in the United States or any other major taxing jurisdiction.

On a periodic basis, we reassess any valuation allowances that we maintain on our deferred tax assets, and weigh positive and negative evidence to assess the recoverability of the deferred tax assets. As of the year ended December 31, 2022, we maintained a state valuation allowance of $155 million. For the three months ended March 31, 2023, we reassessed the state valuation allowance noting the increase in positive evidence, including investments in research and development and future profitability with increased market expansions in the United States. After assessing both the positive evidence and negative evidence, we determined it was more likely than not that we will realize a portion of the state tax attributes and released $44 million. We will continue to maintain a valuation allowance on certain state tax attributes that we expect to expire prior to utilization.

The President signed into law the Inflation Reduction Act (the “IRA”) on August 16, 2022. The Act includes a new 15% corporate minimum tax and a 1% excise tax on the value of corporate stock repurchase, net of new share issuances, after December 31, 2022. We currently are not expecting these provisions to have a material adverse impact to our financial statements. We expect additional guidance and regulations to be issued in future periods and will continue to assess its potential impact on our business and results of operations as further information becomes available.