Income Taxes (Tables)

12 Months Ended

Jul. 31, 2022

Income Tax Disclosure [Abstract]

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)	2022		2021		2020
Current:
Federal	$	253	$	399	$	372
State	93		121		79
Foreign	31		17		21
Total current	377		537		472
Deferred:
Federal	85		(33)		(47)
State	18		(11)		(47)
Foreign	(4)		1		(6)
Total deferred	99		(43)		(100)
Total provision for income taxes	$	476	$	494	$	372

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)	2022		2021		2020
United States	$	2,433	$	2,497	$	2,206
Foreign	109		59		(8)
Total	$	2,542	$	2,556	$	2,198

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)	2022		2021		2020
Income before income taxes	$	2,542	$	2,556	$	2,198
Statutory federal income tax	$	534	$	537	$	462
State income tax, net of federal benefit	87		87		25
Federal research and experimentation credits	(94)		(70)		(54)
Share-based compensation	54		38		22
Federal excess tax benefits related to share-based compensation	(112)		(105)		(79)
Effects of non-U.S. operations	4		4		13
Other, net	3		3		(17)
Total provision for income taxes	$	476	$	494	$	372

Components of deferred tax assets and liabilities

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

	July 31,
(In millions)	2022		2021
Deferred tax assets:
Accruals and reserves not currently deductible	$	84	$	48
Operating lease liabilities	168		113
Accrued and deferred compensation	84		132
Loss and tax credit carryforwards	224		282
Intangible assets	25		33
Share-based compensation	97		59
Other, net	23		16
Total gross deferred tax assets	705		683
Valuation allowance	(244)		(205)
Total deferred tax assets	461		478
Deferred tax liabilities:
Operating lease right-of-use assets	149		96
Intangibles	868		844
Property and equipment	9		10
Other, net	43		45
Total deferred tax liabilities	1,069		995
Net deferred tax assets (liabilities)	$	(608)	$	(517)

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)	2022		2021
Long-term deferred income tax assets	$	11	$	8
Long-term deferred income tax liabilities	(619)		(525)
Net deferred tax assets (liabilities)	$	(608)	$	(517)

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)	2022		2021		2020
Gross unrecognized tax benefits, beginning balance	$	190	$	101	$	120
Increases related to tax positions from prior fiscal years, including acquisitions	9		69		2
Decreases related to tax positions from prior fiscal years	(13)		—		(35)
Increases related to tax positions taken during current fiscal year	31		31		21
Settlements with tax authorities	—		—		(1)
Lapse of statute of limitations	(1)		(11)		(6)
Gross unrecognized tax benefits, ending balance	$	216	$	190	$	101