Income Taxes (Tables)

12 Months Ended

Jul. 31, 2019

Provision for income taxes from continuing operations

The provision for income taxes consisted of the following for the periods indicated:



	Twelve Months Ended July 31,
(In millions)	2019			2018			2017
Current:
Federal	$	271		$	197		$	345
State	67			38			36
Foreign	14			14			8
Total current	352			249			389
Deferred:
Federal	(23		)	(14		)	12
State	(4		)	2			2
Foreign	(1		)	—			2
Total deferred	(28		)	(12		)	16
Total provision for income taxes	$	324		$	237		$	405

Sources of income from continuing operations before the provision for income taxes

The sources of income before the provision for income taxes consisted of the following for the periods indicated:



	Twelve Months Ended July 31,
(In millions)	2019		2018		2017
United States	$	1,826	$	1,528	$	1,383
Foreign	55		38		7
Total	$	1,881	$	1,566	$	1,390

Differences between income taxes calculated using the federal statutory income tax rate and the provision for income taxes from continuing operations

Differences between income taxes calculated using the federal statutory income tax rate and the provision for income taxes were as follows for the periods indicated:



	Twelve Months Ended July 31,
(In millions)	2019			2018			2017
Income before income taxes	$	1,881		$	1,566		$	1,390

U.S. federal statutory rate	21		%	26.9		%	35		%

Statutory federal income tax	$	395		$	420		$	486
State income tax, net of federal benefit	50			29			24
Federal research and experimentation credits	(48		)	(38		)	(24		)
Domestic production activities deduction	—			(28		)	(34		)
Share-based compensation	15			11			14
Federal excess tax benefits related to share-based compensation	(106		)	(94		)	(69		)
2017 Tax Act - Deferred tax re-measurement	—			(29		)	—
Capital loss on subsidiary reorganization	—			(35		)	—
Effects of non-U.S. operations	13			1			6
Other, net	5			—			2
Total provision for income taxes	$	324		$	237		$	405

Components of deferred tax assets and liabilities

Significant deferred tax assets and liabilities were as follows at the dates indicated:



	July 31,
(In millions)	2019			2018
Deferred tax assets:
Accruals and reserves not currently deductible	$	13		$	12
Deferred rent	8			8
Accrued and deferred compensation	48			41
Loss and tax credit carryforwards	117			97
Share-based compensation	47			49
Other, net	3			3
Total gross deferred tax assets	236			210
Valuation allowance	(107		)	(93		)
Total deferred tax assets	129			117
Deferred tax liabilities:
Deferred revenue	66			91
Intangible assets	71			65
Property and equipment	20			19
Other, net	8			8
Total deferred tax liabilities	165			183
Net deferred tax liabilities	$	(36	)	$	(66	)

Components of net deferred tax assets, net of valuation allowances

The components of total net deferred tax liabilities, net of valuation allowances, as shown on our consolidated balance sheets were as follows at the dates indicated:



	July 31,
(In millions)	2019			2018
Long-term deferred income taxes included in other assets	$	1		$	2
Long-term deferred income tax liabilities	(37		)	(68		)
Net deferred tax liabilities	$	(36	)	$	(66	)

Aggregate changes in the balance of gross unrecognized tax benefits

The aggregate changes in the balance of our gross unrecognized tax benefits were as follows for the periods indicated:



	Twelve Months Ended July 31,
(In millions)	2019			2018			2017
Gross unrecognized tax benefits, beginning balance	$	90		$	61		$	60
Increases related to tax positions from prior fiscal years, including acquisitions	13			10			8
Decreases related to tax positions from prior fiscal years	—			(3		)	(8		)
Increases related to tax positions taken during current fiscal year	23			23			9
Settlements with tax authorities	(1		)	(1		)	(8		)
Lapse of statute of limitations	$	(5	)	$	—		$	—
Gross unrecognized tax benefits, ending balance	$	120		$	90		$	61