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Income Taxes
 12 Months Ended
Jun. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before income taxes was derived from the following sources:
202320222021
United States$1,408,206 $646,364 $1,273,037 
Foreign1,271,458 967,862 973,920 
$2,679,664 $1,614,226 $2,246,957 

Income taxes include the following:
202320222021
Federal
  Current$161,465 $297,672 $247,094 
  Deferred81,426 (253,123)(52,960)
Foreign
  Current297,199 303,089 269,607 
  Deferred(13,509)(45,977)8,851 
State and local
  Current45,599 48,479 34,895 
  Deferred23,948 (52,100)(7,391)
$596,128 $298,040 $500,096 

A reconciliation of the effective income tax rate to the statutory federal rate follows:
202320222021
Statutory federal income tax rate21.0 %21.0 %21.0 %
State and local income taxes2.1 (0.2)1.0 
Tax related to international activities1.2 2.7 3.6 
Cash surrender value of life insurance(0.1)0.5 (0.6)
Foreign derived intangible income deduction(1.1)(3.7)(1.0)
Research tax credit(0.7)(0.8)(0.4)
Share-based compensation(1.0)(1.3)(1.6)
Other0.8 0.3 0.3 
Effective income tax rate22.2 %18.5 %22.3 %




Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of assets and liabilities. The differences comprising the net deferred taxes shown on the Consolidated Balance Sheet at June 30 were as follows:
20232022
Retirement benefits$158,560 $207,147 
Other liabilities and reserves333,012 180,624 
Long-term contracts37,747 8,739 
Stock-based compensation33,374 31,490 
Loss carryforwards1,083,732 888,552 
Unrealized currency exchange gains and losses(1,680)254,334 
Inventory96,501 14,649 
Tax credit carryforwards18,773 17,326 
Undistributed foreign earnings(21,304)(21,822)
Depreciation and amortization(2,228,606)(875,623)
Valuation allowance(1,078,354)(901,875)
Net deferred tax (liability)$(1,568,245)$(196,459)
Change in net deferred tax (liability):
Provision for deferred tax$(91,865)$351,201 
Items of other comprehensive (loss) income(64,342)(98,810)
Acquisitions and other(1,215,579)880 
Total change in net deferred tax$(1,371,786)$253,271 

As of June 30, 2023, we recorded deferred tax assets of $1,084 million resulting from $4,350 million in loss carryforwards. A valuation allowance of $1,059 million related to the loss carryforwards has been established due to the uncertainty of their realization. Of this valuation allowance, $1,030 million relates to non-operating entities whose loss carryforward utilization is considered to be remote. Some of the loss carryforwards can be carried forward indefinitely; others can be carried forward from three to 20 years. In addition, a valuation allowance of $20 million related to other future deductible items has been established due to the uncertainty of their realization.

Although future distributions of foreign earnings to the United States should not be subject to U.S. federal income taxes, other U.S. or foreign taxes may be imposed on such earnings. We have analyzed existing factors and determined we will no longer permanently reinvest certain foreign earnings. On these undistributed foreign earnings of approximately $754 million that are no longer permanently reinvested outside of the United States, we have recorded a deferred tax liability of $13 million. The remaining undistributed foreign earnings of approximately $1,130 million remain permanently reinvested outside the United States at June 30, 2023. Of these undistributed earnings, we have recorded a deferred tax liability of $8 million where certain foreign holding companies are not permanently reinvested in their subsidiaries. It is not practicable to estimate the additional taxes, including applicable foreign withholding taxes, that might be payable on the potential distribution of such permanently reinvested foreign earnings.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
202320222021
Balance July 1$90,669 $100,759 $86,277 
Additions for tax positions related to current year9,389 7,039 10,145 
Additions for tax positions of prior years6,171 1,415 10,320 
Additions for acquisitions25,957 — 2,376 
Reductions for tax positions of prior years(3,063)(140)(1,996)
Reductions for settlements(6,923)(3,127)(7,165)
Reductions for expiration of statute of limitations(11,199)(6,647)(2,252)
Effect of foreign currency translation2,502 (8,630)3,054 
Balance June 30$113,503 $90,669 $100,759 

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $114 million, $91 million and $101 million as of June 30, 2023, 2022 and 2021, respectively. The accrued interest related to the gross unrecognized tax benefits, excluded from the amounts above, was $21 million, $18 million, and $18 million as of June 30, 2023, 2022 and 2021, respectively. The accrued penalties related to the gross unrecognized tax benefits, excluded from the amounts above, was $2 million as of June 30, 2023. There were no accrued penalties related to the gross unrecognized tax benefits as of June 30, 2022 and 2021.

It is reasonably possible that, within the next 12 months, the amount of gross unrecognized tax benefits could be reduced by up to approximately $40 million as a result of the revaluation of existing uncertain tax positions arising from developments in the examination process or the closure of tax statutes. Any increase in the amount of unrecognized tax benefits within the next 12 months is expected to be insignificant.
We file income tax returns in the United States and in various foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world. We are open to assessment of our U.S. federal income tax returns by the Internal Revenue Service for years after 2013, and our state and local income tax returns for years after 2016. We are open to assessment for significant foreign jurisdictions for years after 2011.