Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Taxes

Provision for Income Taxes

Our income tax expense consisted of the following for the year ended December 31 (in millions):

	2023		2022		2021
Current:
Federal	$	477	$	456	$	436
State		151		130		132
Foreign		34		43		41
		662		629		609
Deferred:
Federal		73		20		(55)
State		2		30		(22)
Foreign		8		(1)		—
		83		49		(77)
Income tax expense	$	745	$	678	$	532

U.S. Federal Statutory Income Tax Rate Reconciled to Effective Rate

The U.S. federal statutory income tax rate is reconciled to the effective income tax rate for the year ended December 31 as follows:

	2023		2022		2021
Income tax expense at U.S. federal statutory rate	21.00	%	21.00	%	21.00	%
State and local income taxes, net of federal income tax benefit	4.15		4.16		4.14
Federal tax credits	(3.23)		(2.81)		(2.69)
Taxing authority audit settlements and other tax adjustments	(0.02)		0.54		0.53
Tax impact of equity-based compensation transactions	(0.35)		(0.45)		(0.60)
Tax impact of impairments	1.87		0.02		(0.29)
Tax rate differential on foreign income	0.21		0.27		0.37
Other	1.03		0.51		0.16
Effective income tax rate	24.66	%	23.24	%	22.62	%

Summary of income source

For financial reporting purposes, income before income taxes by source for the year ended December 31 was as follows (in millions):

	2023		2022		2021
Domestic	$	2,878	$	2,779	$	2,211
Foreign		143		139		138
Income before income taxes	$	3,021	$	2,918	$	2,349

Components of Net Deferred Tax Assets (Liabilities)

The components of net deferred tax liabilities as of December 31 are as follows (in millions):

	2023		2022
Deferred tax assets:
Net operating loss, capital loss and tax credit carry-forwards	$	137	$	155
Landfill and environmental remediation liabilities		195		216
Operating lease liabilities		128		131
Miscellaneous and other reserves, net		143		117
Subtotal		603		619
Valuation allowance		(181)		(143)
Deferred tax liabilities:
Property and equipment		(1,091)		(1,061)
Goodwill and other intangibles		(1,046)		(1,034)
Operating lease right-of-use assets		(111)		(114)
Net deferred tax liabilities	$	(1,826)	$	(1,733)

Summary of unrecognized tax benefits

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, including accrued interest, is as follows (in millions):

	2023		2022		2021
Balance as of January 1	$	64	$	64	$	37
Additions based on tax positions related to the current year		6		5		22
Additions based on tax positions of prior years		—		—		18
Accrued interest		2		1		3
Settlements		—		—		(12)
Lapse of statute of limitations		(6)		(6)		(4)
Balance as of December 31	$	66	$	64	$	64