v3.26.3
Income Taxes
 12 Months Ended
Sep. 03, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Our income tax (provision) benefit consisted of the following:
For the year ended202620252024
Income before income taxes and equity in net income (loss) of equity method investees
U.S.$4,819 $686 $544 
Foreign94,852 8,968 696 
$99,671 $9,654 $1,240 
Income tax (provision) benefit
Current
U.S. federal$(782)$(275)$(82)
State(272)(15)(1)
Foreign(14,180)(670)(333)
(15,234)(960)(416)
Deferred
U.S. federal522 (118)18 
State46 — — 
Foreign(95)(46)(53)
473 (164)(35)
Income tax (provision) benefit$(14,761)$(1,124)$(451)

In 2026, we adopted ASU 2023-09, Improvements to Income Tax Disclosure, on a prospective basis. The table below reconciles our tax (provision) benefit based on the U.S. federal statutory rate to our effective rate for the year ended September 3, 2026:
For the year ended2026
U.S. federal income tax (provision) benefit at statutory rate$(20,931)21.0 %
State taxes, net of federal benefit(1)
(162)0.2 %
Foreign effects
Singapore
Tax rate differential5,968 (6.0)%
Other(17)— %
Other foreign jurisdictions(316)0.3 %
Other(2)
697 (0.7)%
Income tax (provision) benefit
$(14,761)14.8 %
(1)State taxes in Illinois made up the majority of the tax effects for 2026.
(2)Includes the tax effects of nontaxable or nondeductible items, tax credits, impacts of cross border tax effects, and changes in unrecognized tax benefits.

The table below presents required disclosures prior to the adoption of ASU 2023-09 and reconciles our tax (provision) benefit based on the U.S. federal statutory rate to our effective rate for the years ended August 28, 2025 and August 29, 2024:
For the year ended20252024
U.S. federal income tax (provision) benefit at statutory rate
$(2,027)21.0 %$(260)21.0 %
U.S. tax on foreign operations(476)4.9 (7)0.6 
Change in valuation allowance36 (0.4)(59)4.8 
Change in unrecognized tax benefits(23)0.2 (41)3.3 
Foreign tax rate differential1,132 (11.7)(214)17.2 
Research and development tax credits208 (2.2)76 (6.1)
State taxes, net of federal benefit(7)0.1 12 (1.0)
Other33 (0.3)42 (3.4)
Income tax (provision) benefit$(1,124)11.6 %$(451)36.4 %

The table below provides the updated requirements of ASU 2023-09 for cash paid for income taxes, net of refunds:
For the year ended2026
Federal$275 
State(1)
153 
Foreign
Singapore481 
Other jurisdictions345 
Total cash paid for income taxes, net of refunds$1,254 
(1) State taxes in California made up the majority of the tax effects for 2026.

We operate in a number of jurisdictions outside the United States, including Singapore, where we have tax incentive arrangements. These incentives expire, in whole or in part, at various dates through 2034 and are conditional, in part, upon meeting certain business operations and employment thresholds. For 2026, tax incentive arrangements in Singapore reduced our income tax provision by $11.22 billion. This benefit was largely offset by $9.03 billion of qualified domestic minimum top-up taxes resulting from Singapore’s implementation of the OECD Pillar Two framework. Accordingly, the net benefit of tax incentive arrangements, primarily Singapore, to our income tax provision was $2.21 billion (benefiting our diluted earnings per share by $1.93). For 2025, tax incentive arrangements, primarily Singapore, reduced our income tax provision by $1.05 billion (benefiting our diluted earnings per share by $0.93). As a result of the low level of profitability and geographic mix of income, the benefit from tax incentive arrangements was not material for 2024.

Other noncurrent liabilities included $9.82 billion and $648 million related to income taxes payable as of September 3, 2026 and August 28, 2025, respectively.

As of September 3, 2026, certain non-U.S. subsidiaries had undistributed earnings that are deemed to be indefinitely reinvested. A provision has not been recognized to the extent that distributions from such subsidiaries would be subject to additional foreign withholding or state income tax. Determination of the amount of unrecognized deferred tax liabilities related to investments in these foreign subsidiaries is not practicable.
Deferred income taxes reflect the net tax effects of temporary differences between the bases of assets and liabilities for financial reporting and income tax purposes as well as carryforwards. Deferred tax assets and liabilities consist of the following:
As ofSeptember 3,
2026		August 28,
2025
Deferred tax assets
Net operating loss and tax credit carryforwards$737 $1,016 
Accrued salaries, wages, and benefits529 203 
Operating lease liabilities140 192 
Inventories119 25 
Property, plant, and equipment63 — 
Other202 37 
Gross deferred tax assets1,790 1,473 
Less valuation allowance(581)(634)
Deferred tax assets, net of valuation allowance1,209 839 
Deferred tax liabilities
Right-of-use assets(108)(163)
Other(172)(112)
Deferred tax liabilities(280)(275)
Net deferred tax assets$929 $564 

As of September 3, 2026, and August 28, 2025, we had a valuation allowance of $581 million and $634 million, respectively, against our net deferred tax assets, primarily related to carryforwards in Malaysia and U.S. states.

As of September 3, 2026, we had net operating loss carryforwards of $1.68 billion, of which $1.46 billion in Malaysia can be carried forward indefinitely and the remainder expires between 2027 and 2046.

As of September 3, 2026, we had tax credit carryforwards of $513 million, of which $100 million can be carried forward indefinitely and the remainder expires between 2027 and 2046.

Below is a reconciliation of the beginning and ending amount of our unrecognized tax benefits:
For the year ended202620252024
Beginning unrecognized tax benefits$735 $716 $744 
Increases related to tax positions from prior years17 11 2 
Increases related to prior year tax positions taken in current year
— — 20 
Increases related to tax positions taken in current year64 55 54 
Decreases related to tax positions from prior years(4)(8)(89)
Decreases related to settlement with tax authorities
— — (15)
Reductions due to lapsed statutes of limitations
(17)(39)— 
Ending unrecognized tax benefits$795 $735 $716 

As of September 3, 2026, gross unrecognized tax benefits were $795 million, which would have an impact of approximately $629 million on our effective tax rate in the future, if recognized. Amounts accrued for interest and penalties related to uncertain tax positions were not material for any period presented. The resolution of tax audits or expiration of statute of limitations could also reduce our unrecognized tax benefits.
Our U.S. federal and state tax returns remain open to examination for 2018 through 2026. We are currently under audit by the Internal Revenue Service for our 2018 and 2019 tax years. In addition, tax returns that remain open to examination in Singapore, Taiwan, and Japan range from the years 2021 to 2026.