Income Taxes (Tables)

12 Months Ended

Jul. 25, 2020

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



Years Ended	July 25, 2020			July 27, 2019			July 28, 2018
Federal:
Current	$	1,101		$	1,760		$	9,900
Deferred	(374		)	(84		)	1,156
	727			1,676			11,056
State:
Current	264			302			340
Deferred	287			(2		)	(232		)
	551			300			108
Foreign:
Current	1,429			1,238			1,789
Deferred	49			(264		)	(24		)
	1,478			974			1,765
Total	$	2,756		$	2,950		$	12,929

Income Before Provision for Income Taxes

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



Years Ended	July 25, 2020		July 27, 2019		July 28, 2018
United States	$	7,534	$	7,611	$	3,765
International	6,436		6,960		9,274
Total	$	13,970	$	14,571	$	13,039

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 25, 2020		July 27, 2019		July 28, 2018
Federal statutory rate	21.0	%	21.0	%	27.0	%
Effect of:
State taxes, net of federal tax benefit	3.5		2.0		0.6
Foreign income at other than U.S. rates	(1.5	)	(4.5	)	(5.2	)
Tax credits	(0.9	)	(1.7	)	(2.5	)
Foreign-derived intangible income deduction	(2.6	)	(1.3	)	—
Domestic manufacturing deduction	—		—		(0.5	)
Stock-based compensation	(0.1	)	(0.6	)	(0.1	)
Impact of the Tax Act	—		6.1		80.1
Other, net	0.3		(0.8	)	(0.2	)
Total	19.7	%	20.2	%	99.2	%

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 25, 2020			July 27, 2019			July 28, 2018
Beginning balance	$	1,925		$	2,000		$	1,973
Additions based on tax positions related to the current year	188			185			251
Additions for tax positions of prior years	554			84			84
Reductions for tax positions of prior years	(136		)	(283		)	(129		)
Settlements	(4		)	(38		)	(124		)
Lapse of statute of limitations	(9		)	(23		)	(55		)
Ending balance	$	2,518		$	1,925		$	2,000

Components of Deferred Tax Assets and Liabilities

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



	July 25, 2020			July 27, 2019
Deferred tax assets	$	3,990		$	4,065
Deferred tax liabilities	(81		)	(95		)
Total net deferred tax assets	$	3,909		$	3,970

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



	July 25, 2020			July 27, 2019
ASSETS
Allowance for doubtful accounts and returns	$	110		$	127
Sales-type and direct-financing leases	179			176
Inventory write-downs and capitalization	350			409
Deferred foreign income	253			—
IPR&D, goodwill, and purchased intangible assets	1,289			1,427
Deferred revenue	1,182			1,150
Credits and net operating loss carryforwards	1,105			1,241
Share-based compensation expense	135			164
Accrued compensation	353			342
Lease liabilities	240			—
Other	571			419
Gross deferred tax assets	5,767			5,455
Valuation allowance	(700		)	(457		)
Total deferred tax assets	5,067			4,998
LIABILITIES
Purchased intangible assets	(577		)	(705		)
Depreciation	(179		)	(141		)
Unrealized gains on investments	(119		)	(70		)
ROU lease assets	(222		)	—
Other	(61		)	(112		)
Total deferred tax liabilities	(1,158		)	(1,028		)
Total net deferred tax assets	$	3,909		$	3,970