Income Taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The income tax rates for the six and three months ended June 30, 2021 were 26.3% and 26.1%, respectively, versus 25.4% and 24.4% for the six and three months ended June 30, 2020, respectively. The changes in the tax rates for both periods were due primarily to higher net tax expense in 2021 due to valuation allowances recorded for deferred tax assets related to Altria’s investment in JUUL and Altria’s Investment in Cronos.

The following chart provides a reconciliation of the beginning and ending valuation allowances for the period ended June 30, 2021:

(in millions)
Balance at beginning of year	$	2,817
Additions to valuation allowance charged to income tax expense	233
Reductions to valuation allowance credited to income tax benefit	(49)
Foreign currency translation	(4)
Balance at end of period	$	2,997

Altria determines the realizability of deferred tax assets based on the weight of available evidence, that it is more-likely-than-not that the deferred tax asset will not be realized. In reaching this determination, Altria considers all available positive and negative evidence, including the character of the loss, carryback and carryforward considerations, future reversals of temporary differences and available tax planning strategies.

The current changes in valuation allowances were due to deferred tax assets recorded in connection with Altria’s Investment in Cronos and changes in the estimated fair value of its investment in JUUL.