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Income Taxes | 12 Months Ended
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Sep. 03, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Note 8— TaxesIncome TaxesIncome before income taxes is comprised of the following:202320222021Domestic$6,264 $5,759 $4,931 Foreign2,223 2,081 1,749 Total$8,487 $7,840 $6,680 The provisions for income taxes are as follows:202320222021Federal:Current$1,056 $798 $718 Deferred33 (35)84 Total federal1,089 763 802 State:Current374 333 265 Deferred10 (5)11 Total state384 328 276 Foreign:Current732 851 557 Deferred(10)(17)(34)Total foreign722 834 523 Total provision for income taxes$2,195 $1,925 $1,601 The reconciliation between the statutory tax rate and the effective rate for 2023, 2022, and 2021 is as follows: 202320222021Federal taxes at statutory rate$1,782 21.0 %$1,646 21.0 %$1,403 21.0 %State taxes, net302 3.6 267 3.4 243 3.6 Foreign taxes, net160 1.9 231 3.0 92 1.4 Employee stock ownership plan (ESOP)(25)(0.3)(23)(0.3)(91)(1.3)Other(24)(0.3)(196)(2.5)(46)(0.7)Total$2,195 25.9 %$1,925 24.6 %$1,601 24.0 %The Company recognized total net tax benefits of $62, $130 and $163 in 2023, 2022 and 2021. These include benefits of $54, $94 and $75, related to stock-based compensation. During 2021, there was a net tax benefit of $70 related to the portion of the special dividend paid through the Company's 401(k) plan.The components of the deferred tax assets (liabilities) are as follows:20232022Deferred tax assets:Equity compensation$89 $84 Deferred income/membership fees309 302 Foreign tax credit carry forward250 201 Operating lease liabilities678 727 Accrued liabilities and reserves761 694 Other20 5 Total deferred tax assets2,107 2,013 Valuation allowance(422)(313)Total net deferred tax assets1,685 1,700 Deferred tax liabilities:Property and equipment(867)(962)Merchandise inventories(380)(231)Operating lease right-of-use assets(655)(701)Foreign branch deferreds(87)(85)Total deferred tax liabilities(1,989)(1,979) Net deferred tax liabilities$(304)$(279)The deferred tax accounts at the end of 2023 and 2022 include deferred income tax assets of $491 and $445, included in other long-term assets; and deferred income tax liabilities of $795 and $724, included in other long-term liabilities.In 2023 and 2022, the Company had valuation allowances of $422 and $313, primarily related to foreign tax credits that the Company believes will not be realized due to carry forward limitations. The foreign tax credit carry forwards are set to expire beginning in fiscal 2030.The Company generally no longer considers fiscal year earnings of non-U.S. consolidated subsidiaries after 2017 to be indefinitely reinvested (other than China and Taiwan) and has recorded the estimated incremental foreign withholding taxes (net of available foreign tax credits) and state income taxes payable assuming a hypothetical repatriation to the U.S. The Company considers undistributed earnings of certain non-U.S. consolidated subsidiaries, which totaled $3,225, to be indefinitely reinvested and has not provided for withholding or state taxes. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for 2023 and 2022 is as follows:20232022Gross unrecognized tax benefit at beginning of year$16 $33 Gross increases—current year tax positions1 1 Gross increases—tax positions in prior years11 12 Gross decreases—tax positions in prior years(11)(12)Gross decreases—settlements— (12)Lapse of statute of limitations(1)(6)Gross unrecognized tax benefit at end of year$16 $16 The gross unrecognized tax benefit includes tax positions for which the ultimate deductibility is highly certain but there is uncertainty about the timing of such deductibility. At the end of 2023 and 2022, these amounts were immaterial. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of these tax positions would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority. The total amount of such unrecognized tax benefits that if recognized would favorably affect the effective income tax rate in future periods is $14 and $15 at the end of 2023 and 2022.Accrued interest and penalties related to income tax matters are classified as a component of income tax expense. Accrued interest and penalties recognized during 2023 and 2022, and accrued at the end of each respective period were not material.The Company is currently under audit by several jurisdictions in the United States and abroad. Some audits may conclude in the next 12 months, and the unrecognized tax benefits recorded in relation to the audits may differ from actual settlement amounts. It is not practical to estimate the effect, if any, of any amount of such change during the next 12 months to previously recorded uncertain tax positions in connection with the audits. The Company does not anticipate that there will be a material increase or decrease in the total amount of unrecognized tax benefits in the next 12 months.The Company files income tax returns in the United States, various state and local jurisdictions, in Canada, and in several other foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local examination for years before fiscal 2018. The Company is currently subject to examination in California for fiscal years 2013 to present.Other TaxesThe Company is subject to multiple examinations for value added, sales-based, payroll, product, import or other non-income taxes in various jurisdictions. In certain cases, the Company has received assessments from the authorities. Possible losses or range of possible losses associated with these matters are either immaterial or an estimate of the possible loss or range of loss cannot be made at this time. If certain matters or a group of matters were to be decided adversely to the Company, it could result in a charge that might be material to the results of an individual fiscal quarter or year.

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