v3.26.1
Taxes
 12 Months Ended
Jan. 31, 2026
Taxes Payable [Abstract]  
Taxes Taxes
Income tax expense (benefit) is as follows:
202520242023
CurrentDeferred TotalCurrent Deferred Total CurrentDeferred Total
(millions)
Federal$116 $55 $171 $203 $(50)$153 $189 $(193)$(4)
Foreign1 — 1 — — — (1)— (1)
State and local28 8 36 30 (2)28 54 (51)3 
$145 $62 $207 $233 $(52)$181 $242 $(244)$(2)
The income tax expense (benefit) reported differs from the expected tax computed by applying the federal income tax statutory rate of 21% to income before income taxes. The reasons for this difference and their tax effects are as follows:
202520242023
TaxRateTaxRateTaxRate
(dollars in millions)
Expected tax$178 21.0 %$160 21.0 %$9 21.0 %
State and local income taxes, net of federal income taxes (a)29 3.4 %26 3.4 %2 4.7 %
Foreign tax— — %(1)(0.1)%(2)(4.7)%
Federal tax credits(11)(1.3)%(8)(1.0)%(13)(30.2)%
Change in unrecognized tax benefits(2)(0.2)%(4)(0.5)%(1)(2.3)%
Tax impact of equity awards12 1.4 %5 0.7 %(1)(2.3)%
Other1 0.1 %3 0.3 %4 9.2 %
$207 24.4 %$181 23.8 %$(2)(4.6)%
(a) State taxes in California, New York and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category.
The Company participates in the Internal Revenue Service ("IRS") Compliance Assurance Program ("CAP"). As part of the CAP, tax years are audited on a contemporaneous basis so that all or most issues are resolved prior to the filing of the tax return. The IRS has completed examinations of 2024 and all prior tax years.
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:
January 31,
2026		February 1,
2025
(millions)
Deferred tax assets
Post employment and postretirement benefits$— $1 
Accrued liabilities accounted for on a cash basis for tax purposes105 94 
Lease liabilities844 888 
Unrecognized state tax benefits and accrued interest20 21 
State operating loss and credit carryforwards67 110 
Other60 98 
Valuation allowance(43)(85)
Total deferred tax assets1,053 1,127 
Deferred tax liabilities  
Excess of book basis over tax basis of property and equipment(760)(755)
Right of use assets(576)(605)
Merchandise inventories(366)(348)
Intangible assets(114)(115)
Post employment and postretirement benefits(18)— 
Other(24)(28)
Total deferred tax liabilities(1,858)(1,851)
Net deferred tax liability$(805)$(724)
The valuation allowance at January 31, 2026 and February 1, 2025 relates to net deferred tax assets for certain state net operating loss and credit carryforwards. The net change in the valuation allowance amounted to a decrease of $42 million in 2025 and a decrease of $15 million in 2024.
As of January 31, 2026, the Company had no federal net operating loss carryforwards and state net operating loss carryforwards, net of valuation allowances of $493 million, which will expire between 2026 and 2044. The Company has a full valuation allowance against state credit carryforwards which will expire between 2026 and 2029.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
January 31,
2026		February 1,
2025		February 3,
2024
(millions)
Balance, beginning of year$69 $76 $80 
Additions based on tax positions related to the current year15 11 10 
Reductions for tax positions of prior years(6)(4)(2)
Settlements(3)(1)— 
Statute expirations(12)(13)(12)
Balance, end of year$63 $69 $76 
Amounts recognized in the Consolidated Balance Sheets   
Current income taxes$4 $3 $4 
Deferred income taxes— — 1 
Other liabilities (b)59 66 71 
$63 $69 $76 
(b)Unrecognized tax benefits not expected to be settled within one year are included within other liabilities on the Consolidated Balance Sheets.
Additional information regarding unrecognized benefits and related interest and penalties is as follows:
January 31,
2026		February 1,
2025
(millions)
Amount of unrecognized tax benefits, net of deferred tax assets, that if recognized would affect the effective tax rate
$50 $55 
Accrued federal, state and local interest and penalties26 25 
Amounts recognized in the Consolidated Balance Sheets  
Current income taxes9 5 
Other liabilities17 20 
The Company classifies federal, state and local interest and penalties not expected to be settled within one year as other liabilities on the Consolidated Balance Sheets and follows a policy of recognizing all interest and penalties related to unrecognized tax benefits in income tax expense. The accrued federal, state and local interest and penalties primarily relate to state tax issues and the amount of penalties paid in prior periods, and the amounts of penalties accrued at January 31, 2026 and February 1, 2025, are insignificant. Federal, state and local interest and penalties amounted to expense of $1 million for 2025, income of $1 million for 2024 and expense of $3 million for 2023.
The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2022. With respect to state and local jurisdictions, with limited exceptions, the Company and its subsidiaries are no longer subject to income tax audits for years before 2016. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties have been accrued for any adjustments that are expected to result from the years still subject to examination.
Cash paid for income taxes, net of refunds, is as follows:
202520242023
(millions)
Federal$41 $236 $185 
Foreign— — — 
State and Local
California10 21 *
New York State5 16 17 
New York City3 **
Other11 31 38 
Total payments, net of refunds$70 $304 $240 
* Jurisdiction was below 5 percent of total payments, net for the period presented.