Income Tax

9 Months Ended

Oct. 31, 2021

Income Tax Disclosure [Abstract]

Income Tax

Income Tax

 Autodesk had income tax expense of $50.7 million, relative to pre-tax income of $187.4 million for the three months ended October 31, 2021, and income tax expense of $23.9 million, relative to pre-tax income of $156.1 million for the three months ended October 31, 2020. Income tax expense for the three months ended October 31, 2021, reflects an increase in tax expense as a result of the jurisdictional mix of year-to-date earnings. The quarter over quarter comparison also reflects the U.S. valuation allowance release as of January 31, 2021.

Autodesk had income tax expense of $49.7 million, relative to pre-tax income of $457.6 million for the nine months ended October 31, 2021, and income tax expense of $78.7 million, relative to pre-tax income of $375.6 million for the nine months ended October 31, 2020. Income tax expense for the nine months ended October 31, 2021, reflects a decrease in tax expense due to a discrete tax benefit primarily related to a Supreme Court decision in India on the taxability of software license payments to nonresidents and the associated withholding taxes, offset by an increase in tax expense from jurisdictional mix of year-to-date earnings.

Autodesk regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, Autodesk considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. We have maintained a valuation allowance on our Netherlands, Canada, California, Michigan and U.S. capital loss deferred tax assets as it is more likely than not that some or all of the deferred tax assets will not be realized.

As of October 31, 2021, the Company had $204.6 million of gross unrecognized tax benefits, of which $33.5 million would reduce our valuation allowance, if recognized. The remaining $171.1 million would impact the effective tax rate, if recognized. It is possible that the amount of unrecognized tax benefits will decrease in the next 12 months for an audit settlement of approximately $8.0 million.