INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2021

The components of the provision for income taxes were as follows:

U.S. and foreign components of income before income taxes were as follows:

The items accounting for the difference between income taxes computed at the U.S. federal statutory rate and our effective rate were as follows:



Year Ended June 30,	2021		2020		2019

Federal statutory rate		21.0%		21.0%		21.0%
Effect of:
Foreign earnings taxed at lower rates		(2.7)%		(3.7)%		(4.1)%
Impact of the enactment of the TCJA		0%		0%		0.4%
Impact of intangible property transfers		0%		0%		(5.9)%
Foreign-derived intangible income deduction		(1.3)%		(1.1)%		(1.4)%
State income taxes, net of federal benefit		1.4%		1.3%		0.7%
Research and development credit		(0.9)%		(1.1)%		(1.1)%
Excess tax benefits relating to stock-based compensation		(2.4)%		(2.2)%		(2.2)%
Interest, net		0.5%		1.0%		1.0%
Other reconciling items, net		(1.8)%		1.3%		1.8%


Effective rate		13.8%		16.5%		10.2%

The components of the deferred income tax assets and liabilities were as follows:

(In millions)


June 30,	2021			2020

Deferred Income Tax Assets

Stock-based compensation expense	$	502		$	461
Accruals, reserves, and other expenses		2,960			2,721
Loss and credit carryforwards		1,090			865
Amortization		6,346			6,737
Leasing liabilities		4,060			3,025
Unearned revenue		2,659			1,553
Other		543			354


Deferred income tax assets		18,160			15,716
Less valuation allowance		(769	)		(755	)


Deferred income tax assets, net of valuation allowance	$	17,391		$	14,961


Deferred Income Tax Liabilities

Book/tax basis differences in investments and debt	$	(2,605	)	$	(2,642	)
Leasing assets		(3,834	)		(2,817	)
Depreciation		(1,010	)		(376	)
Deferred GILTI tax liabilities		(2,815	)		(2,581	)
Other		(144	)		(344	)


Deferred income tax liabilities	$	(10,408	)	$	(8,760	)


Net deferred income tax assets	$	6,983		$	6,201


Reported As

Other long-term assets	$	7,181		$	6,405
Long-term deferred income tax liabilities		(198	)		(204	)


Net deferred income tax assets	$	6,983		$	6,201

The aggregate changes in the gross unrecognized tax benefits related to uncertain tax positions were as follows:

(In millions)


Year Ended June 30,	2021			2020			2019

Beginning unrecognized tax benefits	$	13,792		$	13,146		$	11,961
Decreases related to settlements		(195	)		(31	)		(316	)
Increases for tax positions related to the current year		790			647			2,106
Increases for tax positions related to prior years		461			366			508
Decreases for tax positions related to prior years		(297	)		(331	)		(1,113	)
Decreases due to lapsed statutes of limitations		(1	)		(5	)		0


Ending unrecognized tax benefits	$	14,550		$	13,792		$	13,146