Income Taxes (Tables)

12 Months Ended

Jul. 31, 2021

Provision for income taxes from continuing operations

The provision for income taxes consisted of the following for the periods indicated:


	Twelve Months Ended July 31,
(In millions)	2021		2020		2019
Current:
Federal	$	399	$	372	$	271
State	121		79		67
Foreign	17		21		14
Total current	537		472		352
Deferred:
Federal	(33)		(47)		(23)
State	(11)		(47)		(4)
Foreign	1		(6)		(1)
Total deferred	(43)		(100)		(28)
Total provision for income taxes	$	494	$	372	$	324

Sources of income from continuing operations before the provision for income taxes

The sources of income before the provision for income taxes consisted of the following for the periods indicated:


	Twelve Months Ended July 31,
(In millions)	2021		2020		2019
United States	$	2,497	$	2,206	$	1,826
Foreign	59		(8)		55
Total	$	2,556	$	2,198	$	1,881

Differences between income taxes calculated using the federal statutory income tax rate and the provision for income taxes from continuing operations

Differences between income taxes calculated using the federal statutory income tax rate and the provision for income taxes were as follows for the periods indicated:


	Twelve Months Ended July 31,
(In millions)	2021			2020			2019
Income before income taxes	$	2,556		$	2,198		$	1,881

U.S. federal statutory rate	21		%	21		%	21		%

Statutory federal income tax	$	537		$	462		$	395
State income tax, net of federal benefit	87			25			50
Federal research and experimentation credits	(70)			(54)			(48)
Share-based compensation	38			22			15
Federal excess tax benefits related to share-based compensation	(105)			(79)			(106)
Effects of non-U.S. operations	4			13			13
Other, net	3			(17)			5
Total provision for income taxes	$	494		$	372		$	324

Components of deferred tax assets and liabilities

Significant deferred tax assets and liabilities were as follows at the dates indicated:


	July 31,
(In millions)	2021		2020
Deferred tax assets:
Accruals and reserves not currently deductible	$	48	$	23
Operating lease liabilities	113		64

Accrued and deferred compensation	132		112
Loss and tax credit carryforwards	282		114
Intangible assets	33		26
Share-based compensation	59		44
Other, net	16		13
Total gross deferred tax assets	683		396
Valuation allowance	(205)		(132)
Total deferred tax assets	478		264
Deferred tax liabilities:
Deferred revenue	32		68
Operating lease right-of-use assets	96		55
Intangibles	844		45
Property and equipment	10		22
Other, net	13		11
Total deferred tax liabilities	995		201
Net deferred tax assets (liabilities)	$	(517)	$	63

Components of net deferred tax assets, net of valuation allowances

The components of total net deferred tax assets (liabilities), net of valuation allowances, as shown on our consolidated balance sheets were as follows at the dates indicated:


	July 31,
(In millions)	2021		2020
Long-term deferred income taxes	$	8	$	65
Long-term deferred income tax liabilities	(525)		(2)
Net deferred tax assets (liabilities)	$	(517)	$	63

Aggregate changes in the balance of gross unrecognized tax benefits

The aggregate changes in the balance of our gross unrecognized tax benefits were as follows for the periods indicated:


	Twelve Months Ended July 31,
(In millions)	2021		2020		2019
Gross unrecognized tax benefits, beginning balance	$	101	$	120	$	90
Increases related to tax positions from prior fiscal years, including acquisitions	69		2		13
Decreases related to tax positions from prior fiscal years	—		(35)		—
Increases related to tax positions taken during current fiscal year	31		21		23
Settlements with tax authorities	—		(1)		(1)
Lapse of statute of limitations	(11)		(6)		(5)
Gross unrecognized tax benefits, ending balance	$	190	$	101	$	120