Note 5 - Income Taxes

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Income Tax Disclosure [Text Block]

5. Income Taxes

The provision for income taxes and the related effective income tax rates are as follows (in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2021			2020			2021			2020
Provision for income taxes	$	(109	)	$	(23	)	$	(402	)	$	(33	)
Effective tax rate		22.7	%		5.1	%		22.1	%		11.3	%

For the three months ended September 30, 2021, the effective income tax rate differed from the United States (“U.S.”) statutory rate of 21%, primarily due to non-deductible expenses for tax purposes, foreign rate differential, and tax reform items.  For the nine months ended September 30, 2021, the effective income tax rate differed from the U.S. statutory rate of 21% primarily due to an adjustment to the permanently reinvested foreign income position, excess tax benefit related to share-based compensation payments, foreign rate differential, and tax reform items related to The Tax Cuts and Jobs Act of 2017.

For the three and nine months ended September 30, 2020, the effective income tax rate differed from the U.S. statutory rate of 21%, primarily due to an estimate of income tax benefits generated by a current year net operating loss that will be carried-back to prior years as allowed under the CARES Act and changes of estimates based on the final 2019 U.S. tax return which were partially offset by additional income tax reserves.  For the nine months ended September 30, 2020, the effective income tax rate differed from the U.S. statutory rate of 21% primarily due to an estimate of income tax benefits generated by a current year net operating loss that will be carried-back to prior years as allowed under the CARES Act and changes of estimates based on the final 2019 U.S. tax return which were partially offset by income tax reserves, an adjustment to the permanently reinvested foreign income position and foreign valuation allowances on deferred tax assets.

Corning Precision Materials is currently appealing certain tax assessments and tax refund claims in South Korea for tax years 2010 through 2018. The Company was required to deposit the disputed amounts with the South Korean government as a condition of its appeal of any tax assessments. Corning believes that it is more likely than not the Company will prevail in the appeals process.  As of September 30, 2021 and December 31, 2020, non-current receivables of $350 million and $365 million, respectively, were recorded related to these appeals.