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INCOME TAXES (Tables) | 12 Months Ended
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Jun. 30, 2023
Income Tax Disclosure [Abstract] |
Provision for Income Taxes | The components of the provision for income taxes were as follows:
(In millions) |
Year Ended June 30, |  | 2023 |  |  | 2022 |  |  | 2021 |
Current Taxes |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | 14,009 |  |  | $ | 8,329 |  |  | $ | 3,285 |
U.S. state and local |  |  | 2,322 |  |  |  | 1,679 |  |  |  | 1,229 |
Foreign |  |  | 6,678 |  |  |  | 6,672 |  |  |  | 5,467 |
Current taxes |  | $ | 23,009 |  |  | $ | 16,680 |  |  | $ | 9,981 |
Deferred Taxes |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | (6,146 | ) |  | $ | (4,815 | ) |  | $ | 25 |
U.S. state and local |  |  | (477 | ) |  |  | (1,062 | ) |  |  | (204 | )
Foreign |  |  | 564 |  |  |  | 175 |  |  |  | 29 |
Deferred taxes |  | $ | (6,059 | ) |  | $ | (5,702 | ) |  | $ | (150 | )
Provision for income taxes |  | $ | 16,950 |  |  | $ | 10,978 |  |  | $ | 9,831 |
Income Before Income Taxes | U.S. and foreign components of income before income taxes were as follows:
(In millions) |
Year Ended June 30, |  | 2023 |  |  | 2022 |  |  | 2021 |
U.S. |  | $ | 52,917 |  |  | $ | 47,837 |  |  | $ | 34,972 |
Foreign |  |  | 36,394 |  |  |  | 35,879 |  |  |  | 36,130 |
Income before income taxes |  | $ | 89,311 |  |  | $ | 83,716 |  |  | $ | 71,102 |
Difference Between Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes | The items accounting for the difference between income taxes computed at the U.S. federal statutory rate and our effective rate were as follows:
Year Ended June 30, |  | 2023 |  |  | 2022 |  |  | 2021 |
Federal statutory rate |  |  | 21.0% |  |  |  | 21.0% |  |  |  | 21.0% |
Effect of: |  |  |  |  |  |  |  |  |  |  |  |
Foreign earnings taxed at lower rates |  |  | (1.8)% |  |  |  | (1.3)% |  |  |  | (2.7)% |
Impact of intangible property transfers |  |  | 0% |  |  |  | (3.9)% |  |  |  | 0% |
Foreign-derived intangible income deduction |  |  | (1.3)% |  |  |  | (1.1)% |  |  |  | (1.3)% |
State income taxes, net of federal benefit |  |  | 1.6% |  |  |  | 1.4% |  |  |  | 1.4% |
Research and development credit |  |  | (1.1)% |  |  |  | (0.9)% |  |  |  | (0.9)% |
Excess tax benefits relating to stock-based compensation |  |  | (0.7)% |  |  |  | (1.9)% |  |  |  | (2.4)% |
Interest, net |  |  | 0.8% |  |  |  | 0.5% |  |  |  | 0.5% |
Other reconciling items, net |  |  | 0.5% |  |  |  | (0.7)% |  |  |  | (1.8)% |
Effective rate |  |  | 19.0% |  |  |  | 13.1% |  |  |  | 13.8% |
Deferred Income Tax Assets and Liabilities | The components of the deferred income tax assets and liabilities were as follows:
(In millions) |  |  |  |  |  |
June 30, |  | 2023 |  |  | 2022 |
Deferred Income Tax Assets |  |  |  |  |  |  |  |
Stock-based compensation expense |  | $ | 681 |  |  | $ | 601 |
Accruals, reserves, and other expenses |  |  | 3,131 |  |  |  | 2,874 |
Loss and credit carryforwards |  |  | 1,441 |  |  |  | 1,546 |
Amortization (a) |  |  | 9,440 |  |  |  | 10,183 |
Leasing liabilities |  |  | 5,041 |  |  |  | 4,557 |
Unearned revenue |  |  | 3,296 |  |  |  | 2,876 |
Book/tax basis differences in investments and debt |  |  | 373 |  |  |  | 0 |
Capitalized research and development (a) |  |  | 6,958 |  |  |  | 473 |
Other |  |  | 489 |  |  |  | 461 |
Deferred income tax assets |  |  | 30,850 |  |  |  | 23,571 |
Less valuation allowance |  |  | (939 | ) |  |  | (1,012 | )
Deferred income tax assets, net of valuation allowance |  | $ | 29,911 |  |  | $ | 22,559 |
Deferred Income Tax Liabilities |  |  |  |  |  |  |  |
Book/tax basis differences in investments and debt |  | $ | 0 |  |  | $ | (174 | )
Leasing assets |  |  | (4,680 | ) |  |  | (4,291 | )
Depreciation |  |  | (2,674 | ) |  |  | (1,602 | )
Deferred tax on foreign earnings |  |  | (2,738 | ) |  |  | (3,104 | )
Other |  |  | (89 | ) |  |  | (103 | )
Deferred income tax liabilities |  | $ | (10,181 | ) |  | $ | (9,274 | )
Net deferred income tax assets |  | $ | 19,730 |  |  | $ | 13,285 |
Reported As |  |  |  |  |  |  |  |
Other long-term assets |  | $ | 20,163 |  |  | $ | 13,515 |
Long-term deferred income tax liabilities |  |  | (433 | ) |  |  | (230 | )
Net deferred income tax assets |  | $ | 19,730 |  |  | $ | 13,285 |
(a) Provisions enacted in the TCJA related to the capitalization for tax purposes of research and development expenditures became effective on July 1, 2022. These provisions require us to capitalize research and development expenditures and amortize them on our U.S. tax return over five or fifteen years, depending on where research is conducted.
Changes in Gross Unrecognized Tax Benefits Related to Uncertain Tax Positions | The aggregate changes in the gross unrecognized tax benefits related to uncertain tax positions were as follows:
(In millions) |  |  |  |  |  |  |  |  |
Year Ended June 30, |  | 2023 |  |  | 2022 |  |  | 2021 |
Beginning unrecognized tax benefits |  | $ | 15,593 |  |  | $ | 14,550 |  |  | $ | 13,792 |
Decreases related to settlements |  |  | (329 | ) |  |  | (317 | ) |  |  | (195 | )
Increases for tax positions related to the current year |  |  | 1,051 |  |  |  | 1,145 |  |  |  | 790 |
Increases for tax positions related to prior years |  |  | 870 |  |  |  | 461 |  |  |  | 461 |
Decreases for tax positions related to prior years |  |  | (60 | ) |  |  | (246 | ) |  |  | (297 | )
Decreases due to lapsed statutes of limitations |  |  | (5 | ) |  |  | 0 |  |  |  | (1 | )
Ending unrecognized tax benefits |  | $ | 17,120 |  |  | $ | 15,593 |  |  | $ | 14,550 |

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