Income Tax |
9 Months Ended |
|---|---|
Oct. 31, 2022 | |
| Income Tax Disclosure [Abstract] | |
| Income Tax | Income Tax Autodesk had income tax expense of $44 million, relative to pre-tax income of $242 million for the three months ended October 31, 2022, and income tax expense of $51 million, relative to pre-tax income of $188 million for the three months ended October 31, 2021. Income tax expense for the three months ended October 31, 2022, reflects a decrease in tax expense relating to a U.S. foreign derived intangible income benefit driven by the capitalization of research and development expenditures starting in fiscal 2023 as required by the U.S. Tax Cuts and Jobs Act (“Tax Act”), offset by an increase in tax expense relating to stock-based compensation and final U.S. foreign tax credit regulations enacted in fiscal 2023. Autodesk had income tax expense of $139 million, relative to pre-tax income of $669 million for the nine months ended October 31, 2022, and income tax expense of $50 million, relative to pre-tax income of $458 million for the nine months ended October 31, 2021. Income tax expense for the nine months ended October 31, 2022, reflects an increase in tax expense relating to stock-based compensation and final U.S. foreign tax credit regulations enacted in fiscal 2023, offset by a U.S. foreign derived intangible income benefit driven by the capitalization of research and development expenditures starting in fiscal 2023 as required by the Tax Act. In addition, the nine months ended October 31, 2021 included a non-recurring discrete tax benefit relating to the Supreme Court decision in India on the taxability of software license payments to nonresidents. Autodesk regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, Autodesk considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. We have maintained a valuation allowance on all or part of our Netherlands, Canada, Australia, California, Michigan deferred tax assets, as well as our U.S. capital loss deferred tax assets as it is more likely than not that some or all of the deferred tax assets will not be realized. As of October 31, 2022, the Company had $213 million of gross unrecognized tax benefits, of which $35 million would reduce our valuation allowance, if recognized. The remaining $178 million would impact the effective tax rate, if recognized. The company’s unrecognized tax benefits decreased by $8 million in the nine months ended October 31, 2022, due to the settlement of a German tax audit for tax years 2014-2016. On August 16, 2022, the Inflation Reduction Act was signed into law. The Inflation Reduction Act contains a number of revisions to the Internal Revenue Code effective in taxable years beginning after December 31, 2022, including a 15% corporate minimum income tax and a 1% excise tax on corporate stock repurchases by publicly traded U.S. corporations. Autodesk is currently assessing the impact the Inflation Reduction Act will have on its consolidated financial statements.
|