Income Taxes

6 Months Ended

Mar. 04, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our income tax (provision) benefit consisted of the following:

	Quarter ended						Six months ended
	March 4, 2021			February 27, 2020			March 4, 2021			February 27, 2020
Income before taxes	$	635		$	427		$	1,476		$	988
Income tax (provision) benefit	(48)			(21)			(99)			(76)
Effective tax rate	7.6		%	4.9		%	6.7		%	7.7		%

We operate in a number of jurisdictions outside the United States, including Singapore, where we have tax incentive arrangements. These incentives expire, in whole or in part, at various dates through 2034 and are conditional, in part, upon meeting certain business operations and employment thresholds. The effect of tax incentive arrangements reduced our tax provision by $45 million (benefiting our diluted earnings per share by $0.04) and $101 million ($0.09 per diluted share) for the second quarter and first six months of 2021, respectively, and were not significant to our tax provision for the second quarter or first six months of 2020.

As of March 4, 2021, gross unrecognized tax benefits were $415 million, substantially all of which would affect our effective tax rate in the future, if recognized. Amounts accrued for interest and penalties related to uncertain tax positions were not significant for any period presented. During the second quarter of 2021, we received notice from the Internal Revenue Service that they intend to examine our 2018 and 2019 tax years. We believe that adequate amounts of taxes and related interest and penalties have been provided.