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Income Taxes
 12 Months Ended
Jan. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The provision for income taxes consists of the following:
 Fiscal year ended January 31,
202420232022
Federal:
Current$86 $219 $(1)
Deferred(97)(222)(5)
State:
Current21 28 2 
Deferred3 (19)1 
Foreign:
Current206 151 83 
Deferred11 (34)(12)
Income tax provision $230 $123 $68 

Foreign pretax income was $730 million in fiscal 2024, $755 million in fiscal 2023, and $560 million in fiscal 2022.
The differences between the U.S. statutory rate and the aggregate income tax provision are as follows:
 Fiscal year ended January 31,
202420232022
Income tax provision at U.S. Federal statutory rate$239 $199 $119 
State income tax benefit, net of the U.S. Federal benefit24 (3)2 
Foreign income taxed at rates different from the U.S. statutory rate(12)22 (25)
Valuation allowance adjustment1 (38)— 
Tax effect of non-deductible stock-based compensation38 34 32 
Stock compensation (windfall) / shortfall2 10 (43)
Research and development tax credit benefit(17)(12)(19)
Closure of income tax audits and changes in uncertain tax positions13 11 — 
Tax effect of officer compensation in excess of $1 million
8 10 7 
Non-deductible expenses2 1 5 
Global intangible low-taxed income, foreign derived intangible income(39)(106)24 
India withholding tax refund— — (44)
Acquisition-related integrations(29)(2)9 
Other— (3)1 
Income tax provision $230 $123 $68 

    
Autodesk’s fiscal 2024 tax expense is primarily driven by the U.S. and foreign tax expense, including withholding taxes on payments made to the United States or to Singapore from foreign sources, an increase in tax expense relating to stock-based compensation, reduced by non-recurring integration net tax benefit and an income tax benefit arising from relief provided by the Internal Revenue Service relating to U.S. foreign tax credit regulations.
Significant components of Autodesk’s deferred tax assets and liabilities are as follows:
 January 31,
20242023
Stock-based compensation$53 $54 
Research and development tax credit carryforwards118 103 
Foreign tax credit carryforwards4 — 
Accrued compensation and benefits11 7 
Other accruals not currently deductible for tax15 26 
Capitalized research and development514 340 
Fixed assets21 22 
Lease liability80 92 
Tax loss carryforwards10 38 
Deferred revenue538 653 
Purchased technology 33 (26)
Other31 23 
Total deferred tax assets1,428 1,332 
Less: valuation allowance(149)(148)
Net deferred tax assets1,279 1,184 
Indefinite lived intangibles(128)(109)
Right-of-use assets(52)(58)
Unremitted earnings of foreign subsidiaries— (2)
Deferred taxes on foreign earnings(29)(33)
Total deferred tax liabilities(209)(202)
Net deferred tax assets$1,070 $982 

Autodesk regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, Autodesk evaluates whether it is more likely than not that some or all of the deferred tax assets will not be realized based on all available positive and negative evidence.

The Company continues to retain a valuation allowance against Portugal, New Zealand, California, Massachusetts and Michigan deferred tax assets and deferred tax assets that will convert into a capital loss upon reversal in Australia and U.S., as we do not have sufficient income of the appropriate character to benefit these deferred tax assets. We released our Canada valuation allowance in fiscal 2023 due to positive evidence supporting the utilization of the R&D credits before they expire, resulting in a $38 million non-cash benefit to earnings. The Company established a valuation allowance in Massachusetts in fiscal 2024 on the basis that it is more likely than not that some or all of the deferred tax assets will not be realized. The impact of this establishment was offset by a decrease in the valuation allowance in the Netherlands due to the elimination of the deferred tax assets in that jurisdiction in fiscal 2024.

The valuation allowance decreased by $1 million in fiscal 2024, primarily due to utilization of deferred tax attributes. The valuation allowance decreased by $40 million in fiscal 2023, primarily due to the release of the Canada valuation allowance of $38 million.

The company has elected to recognize any potential GILTI obligations as an expense in the period it is incurred.

As of January 31, 2024, Autodesk had $6 million of cumulative U.S. federal tax loss carryforwards and $283 million of cumulative U.S. state tax loss carryforwards, which may be available to reduce future income tax liabilities in federal and state jurisdictions. The pre-fiscal 2019 U.S. federal tax loss carryforward will expire beginning fiscal 2035 through fiscal 2039. U.S. federal losses generated beginning in fiscal 2019 do not expire and are carried forward indefinitely. The U.S. state tax loss carryforward will expire beginning fiscal 2025 through fiscal 2044. In addition to U.S. federal and state tax loss carryforwards, Portugal, Norway, New Zealand and other foreign jurisdictions incurred tax losses totaling $14 million, which may be available to reduce future income tax liabilities. Our Portugal, Norway, and New Zealand losses of $8 million, $3 million, and $2 million,
respectively, have an indefinite expiration period. Portugal and New Zealand losses have a full valuation allowance against them on our balance sheet as the Company has determined it is more likely than not that these losses will not be utilized.

As of January 31, 2024, Autodesk had $123 million of cumulative California state research tax credit carryforwards, $15 million of cumulative Massachusetts state research tax credit carryforwards, and $43 million of cumulative Canadian federal research, which may be available to reduce future income tax liabilities in the respective jurisdictions. The state research tax credit carryforwards in California and Massachusetts may reduce future California and Massachusetts income tax liabilities indefinitely in those respective states, and the Canadian research tax credit carryforwards will expire beginning fiscal 2031 through fiscal 2044. Autodesk also has $4 million of cumulative U.S. federal foreign tax credit carryforwards, which may be available to reduce future U.S. tax liabilities. These foreign tax credits will expire beginning fiscal 2027 through fiscal 2034. As discussed above, the California and Massachusetts cumulative assets have full valuation allowance against them on our balance sheet as the Company has determined it is more likely than not that these losses and credits will not be utilized.

Utilization of net operating losses and tax credits may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code and similar state provisions. This annual limitation may result in the expiration of net operating losses and credits before utilization. No ownership change has occurred through the balance sheet date that would result in permanent losses of the U.S. federal and state tax attributes.

As of January 31, 2024, the Company had $261 million of gross unrecognized tax benefits, of which $43 million would reduce our valuation allowance, if recognized. The remaining $218 million would impact the effective tax rate. The amount of unrecognized tax benefits will decrease in the next twelve months for statute lapse is nil.

A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits is as follows:
Fiscal Year Ended January 31,
202420232022
Gross unrecognized tax benefits at the beginning of the fiscal year (1)$238 $217 $198 
Increases for tax positions of prior years (1)23 9 9 
Decreases for tax positions of prior years (1)(11)(3)— 
Increases for tax positions related to the current year (1)13 21 10 
Decreases relating to settlements with taxing authorities— (5)— 
Reductions as a result of lapse of the statute of limitations(2)(1)— 
Gross unrecognized tax benefits at the end of the fiscal year$261 $238 $217 
  _______________
(1)During the year ended January 31, 2024, the Company corrected its presentation to remove correlative benefits related to certain transfer pricing matters. The above comparatives for fiscal 2023 and 2022 have been corrected to conform to the current period presentation. The effect of the change on the ending gross unrecognized tax benefits was $15 million in fiscal 2023 and $10 million in fiscal 2022.
    
It is the Company’s continuing practice to recognize interest and/or penalties related to income tax matters in income tax expense. Autodesk had $7 million, $5 million, and $7 million, net of tax benefit, accrued for interest and penalties related to unrecognized tax benefits as of January 31, 2024, 2023, and 2022, respectively. There was $2 million, $(2) million, and $2 million of net expense for interest and penalties related to tax matters recorded through the consolidated statements of operations for the years ended January 31, 2024, 2023, and 2022, respectively.

Autodesk’s U.S. and state income tax returns for fiscal 2002 through fiscal 2024 remain open to examination due to either net operating loss or credit carryforward. The Internal Revenue Service notified the Company of examination of the Company’s consolidated federal income tax returns for fiscal 2020 and 2021. This audit commenced in February 2022 and remains in progress.
Autodesk files tax returns in multiple foreign taxing jurisdictions with open tax years ranging from fiscal 2005 to 2024.