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Income Taxes
9 Months Ended
Mar. 30, 2019
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES

Effective Tax Rate

The effective tax rates for the third quarter and first 39 weeks of fiscal 2019 were (2.12)% and 13.98%, respectively. The lower effective tax rates for the third quarter and first 39 weeks of fiscal 2019 are primarily due to (1) Sysco’s determination in the third quarter of fiscal 2019 to recognize the favorable impact of $95.1 million of foreign tax credits generated as a result of distributions to Sysco from our foreign operations at the end of fiscal 2018, which fully offset our transition tax liability, (2) lower U.S. tax rates from the Tax Cuts and Jobs Act (Tax Act), which were not yet fully applicable as of the third quarter of fiscal 2018, and (3) the favorable impact of excess tax benefits of equity-based compensation that totaled $11.3 million and $33.2 million for the third quarter and first 39 weeks of fiscal 2019, respectively. These reductions were partially offset by additional U.S. federal tax as a result of the global intangible low taxed income (GILTI) regime, which the company is accounting for as a periodic cost. The effective tax rate for the third quarter of fiscal 2018 of 9.54% and the first 39 weeks of fiscal 2018 of 27.97% reflects the favorable impact of (1) a net tax benefit attributable to the change in the federal statutory tax rate as a result of the Tax Act, (2) the tax benefit of $44.4 million attributable to a contribution to the U.S. Retirement Plan, and (3) excess tax benefits of equity-based compensation that totaled $14.9 million and $45.7 million for the third quarter and first 39 weeks of fiscal 2018, respectively. An additional factor that impacted the effective tax rate for the first 39 weeks of fiscal 2018 was the favorable impact of changes in tax law in various foreign jurisdictions of $8.1 million. These benefits were partially offset by the negative impacts of the transition tax resulting from the Tax Act.

In accordance with SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Job Act, the company recognized the provisional impacts related to re-measurement of deferred tax assets and liabilities and the one-time transition tax in its results for the annual period ended June 30, 2018. In the second quarter of fiscal 2019, the company completed its accounting for all aspects of the Tax Act, with a corresponding adjustment of $15.1 million to income tax expense related to transition tax, and a benefit of $3.2 million attributable to realizability of certain deferred tax assets.

Uncertain Tax Positions

As of March 30, 2019, the gross amount of unrecognized tax benefit and related accrued interest was $26.6 million and $4.6 million, respectively. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of the company’s unrecognized tax positions will increase or decrease in the next twelve months. At this time, an estimate of the range of the reasonably possible change cannot be made.

Other

The determination of the company’s provision for income taxes requires judgment, the use of estimates and the interpretation and application of complex tax laws. The company’s provision for income taxes reflects a combination of income earned and taxed in the various U.S. federal and state, as well as foreign, jurisdictions. Jurisdictional tax law changes, increases or decreases in permanent differences between book and tax items, accruals or adjustments of accruals for unrecognized tax benefits or valuation allowances, and the company’s change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate.