Income Taxes (Tables)

12 Months Ended

Jul. 27, 2019

The provision for income taxes consists of the following (in millions):



Years Ended	July 27, 2019			July 28, 2018			July 29, 2017
Federal:
Current	$	1,760		$	9,900		$	1,300
Deferred	(84		)	1,156			(42		)
	1,676			11,056			1,258
State:
Current	302			340			86
Deferred	(2		)	(232		)	56
	300			108			142
Foreign:
Current	1,238			1,789			1,416
Deferred	(264		)	(24		)	(138		)
	974			1,765			1,278
Total	$	2,950		$	12,929		$	2,678

Income Before Provision for Income Taxes

Income before provision for income taxes consists of the following (in millions):



Years Ended	July 27, 2019		July 28, 2018		July 29, 2017
United States	$	7,611	$	3,765	$	2,393
International	6,960		9,274		9,894
Total	$	14,571	$	13,039	$	12,287

Difference Between Income Taxes at Federal Statutory Rate and Provision for Income Taxes

The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes consist of the following:



Years Ended	July 27, 2019		July 28, 2018		July 29, 2017
Federal statutory rate	21.0	%	27.0	%	35.0	%
Effect of:
State taxes, net of federal tax benefit	2.0		0.6		1.1
Foreign income at other than U.S. rates	(4.5	)	(5.2	)	(13.4	)
Tax credits	(1.7	)	(2.5	)	(1.2	)
Foreign-derived intangible income deduction	(1.3	)	—		—
Domestic manufacturing deduction	—		(0.5	)	(0.4	)
Stock-based compensation	(0.6	)	(0.1	)	1.4
Impact of the Tax Act	6.1		80.1		—
Other, net	(0.8	)	(0.2	)	(0.7	)
Total	20.2	%	99.2	%	21.8	%

Aggregate Changes in Gross Unrecognized Tax Benefits

The aggregate changes in the balance of gross unrecognized tax benefits were as follows (in millions):



Years Ended	July 27, 2019			July 28, 2018			July 29, 2017
Beginning balance	$	2,000		$	1,973		$	1,627
Additions based on tax positions related to the current year	185			251			336
Additions for tax positions of prior years	84			84			180
Reductions for tax positions of prior years	(283		)	(129		)	(78		)
Settlements	(38		)	(124		)	(43		)
Lapse of statute of limitations	(23		)	(55		)	(49		)
Ending balance	$	1,925		$	2,000		$	1,973

Components of Deferred Tax Assets and Liabilities

The following table presents the breakdown for net deferred tax assets (in millions):



	July 27, 2019			July 28, 2018
Deferred tax assets	$	4,065		$	3,219
Deferred tax liabilities	(95		)	(141		)
Total net deferred tax assets	$	3,970		$	3,078

The following table presents the components of the deferred tax assets and liabilities (in millions):



	July 27, 2019			July 28, 2018
ASSETS
Allowance for doubtful accounts and returns	$	127		$	285
Sales-type and direct-financing leases	176			171
Inventory write-downs and capitalization	409			289
Investment provisions	—			54
IPR&D, goodwill, and purchased intangible assets	1,427			63
Deferred revenue	1,150			1,584
Credits and net operating loss carryforwards	1,241			1,087
Share-based compensation expense	164			190
Accrued compensation	342			370
Other	419			408
Gross deferred tax assets	5,455			4,501
Valuation allowance	(457		)	(374		)
Total deferred tax assets	4,998			4,127
LIABILITIES
Purchased intangible assets	(705		)	(753		)
Depreciation	(141		)	(118		)
Unrealized gains on investments	(70		)	(33		)
Other	(112		)	(145		)
Total deferred tax liabilities	(1,028		)	(1,049		)
Total net deferred tax assets	$	3,970		$	3,078