Income Tax

9 Months Ended

Oct. 31, 2023

Income Tax Disclosure [Abstract]

Income Tax

Income Tax

 Autodesk had income tax expense of $79 million, relative to pre-tax income of $320 million for the three months ended October 31, 2023, and income tax expense of $44 million, relative to pre-tax income of $242 million for the three months ended October 31, 2022. Income tax expense for the three months ended October 31, 2023, reflects an increased withholding tax expense and non-recurring integration tax expense, offset by a decrease in tax expense as a result of jurisdictional mix of year-to-date earnings, resulting in a net tax expense increase year over year.

Autodesk had income tax expense of $175 million, relative to pre-tax income of $799 million for the nine months ended October 31, 2023, and income tax expense of $139 million, relative to pre-tax income of $669 million for the nine months ended October 31, 2022. Income tax expense for the nine months ended October 31, 2023, reflects a reduced U.S. foreign derived intangible income tax benefit, increased withholding tax expense and non-recurring integration tax expense, offset by an income tax benefit arising from temporary relief provided by the Internal Revenue Service relating to U.S. foreign tax credit regulations and reduced tax expense relating to stock-based compensation.

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 all or part of our Australia, New Zealand, California, Michigan deferred tax assets, as well as our U.S. capital loss deferred tax assets as it is more likely than not that these deferred tax assets will not be realized.

As of October 31, 2023, the Company had $234 million of gross unrecognized tax benefits, of which $195 million would impact the effective tax rate, if recognized. The remaining $39 million would reduce our valuation allowance, if recognized. Approximately $2 million of unrecognized tax benefits will decrease in the next twelve months for statute lapses.

Signed into law on August 16, 2022, the Inflation Reduction Act contains many revisions to the Internal Revenue Code effective in taxable years beginning after December 31, 2022, including a 15% corporate alternative minimum tax. Autodesk continues to monitor the impact of the Inflation Reduction Act on its consolidated financial statements.