Income Taxes |
6 Months Ended |
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Jun. 30, 2023 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes Our effective tax rate was 12% and 22% during the six months ended June 30, 2023 and 2022, respectively, and 4% and 23% during the three months ended June 30, 2023 and 2022, respectively. The effective tax rates for the six months and three months ended June 30, 2023 were lower than the effective tax rates for the comparable periods in 2022 primarily due to the tax benefits resulting from favorable audit settlements for prior years, deferred and current tax benefits from state apportionment changes and the application of the high-tax exception to the Global Intangible Low-Taxed Income, or GILTI, in the current period, partially offset by the impact of the U.K. corporate income tax increase from 19% to 25% effective April 1, 2023. In conjunction with the increase in the U.K. corporate income tax rate, we intend to elect the GILTI high-tax exception election in 2023. During the three months ended June 30, 2023, our tax provision includes the impacts of this election, which resulted in a reduction in our GILTI inclusions. Our unrecognized tax benefit as of June 30, 2023 was $240 million, a $7 million net decrease from the $247 million as of December 31, 2022. The net decrease includes a $40 million reduction as a result of audit settlements, a $20 million increase related to current year positions, a $31 million increase related to prior year positions, and an $18 million reduction related to prior year positions. In August 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law. The IRA introduced a 15% corporation minimum tax, or CAMT, on adjusted financial statement income for corporations with profits in excess of $1 billion, effective for tax years after December 31, 2022. Based on the current guidance provided by the Internal Revenue Service and Treasury, the implementation of the CAMT does not have a material impact to our financial statements as of June 30, 2023. The IRA also includes a share buyback excise tax of 1% on share repurchases, which will apply to net share repurchases after December 31, 2022. During the six months ended June 30, 2023, we did not repurchase any shares, therefore, we were not subject to any excise tax. The newly imposed excise tax on share repurchases is not considered an income tax. Any excise tax, as a result of future share repurchases, will be considered part of the cost of the shares repurchased and reflected in the equity section of our consolidated financial statements.
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