Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rate for the first quarter of 2023 was 17.7 percent, a decrease from 18.8 percent in the prior year. The primary factor that decreased the Company's effective tax rate for first quarter 2023 was deferred tax impacts of 2023 activity.

The total amounts of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of March 31, 2023 and December 31, 2022 are $994 million and $965 million, respectively. It is reasonably possible that the amount of unrecognized tax benefits could significantly change within the next 12 months. At this time, the Company is not able to estimate the range by which these potential events could impact 3M’s unrecognized tax benefits in the next 12 months.

As of March 31, 2023 and December 31, 2022, the Company had valuation allowances of $114 million and $115 million on its deferred tax assets, respectively.