Income Taxes

3 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The differences that caused our effective income tax rates to differ from the 21% U.S. federal statutory rate for income taxes were as follows:

	Three Months Ended June 30,
	2019			2018
	(in millions)
Income tax benefit (expense) at the federal statutory rate	$	29		$	(46	)
Effect of:
State income taxes, net of federal income tax effect	5			(15		)
State law changes, net of federal income tax effect	—			24
Increase deferred tax liability for organizational restructuring	—			(13		)
Credit for increasing research activities	4			—
Change in federal and state valuation allowance	(14		)	6
Other, net	(2		)	(3		)
Income tax benefit (expense)	$	22		$	(47	)
Effective income tax rate	16.2		%	21.4		%

Income tax benefit of $22 million for the three-month period ended June 30, 2019 represented a consolidated effective tax rate of 16%. During the period, we recognized a $14 million tax expense for federal and state valuation allowance. This expense partially offsets the tax benefit recognized from the pre-tax book loss at the U.S. federal statutory tax rate.

Income tax expense of $47 million for the three-month period ended June 30, 2018 represented a consolidated effective tax rate of 21%. During the period, we recognized a $24 million tax benefit for the impact of state law changes enacted during the period, partially offset by a $13 million tax expense attributable to organizational restructuring. These adjustments were primarily driven by the change in carrying value of our deferred tax assets and liabilities on temporary differences.

As of June 30, 2019 and March 31, 2019, we maintained unrecognized tax benefits of $244 million and $242 million, respectively. Cash paid for income taxes, net was $27 million and $39 million for the three-month periods ended June 30, 2019 and 2018, respectively.