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INCOME TAXES | 12 Months Ended
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Feb. 02, 2025
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Provision for Income Taxes The following table presents our earnings before the provision for income taxes:
in millions | Fiscal |  | Fiscal |  | Fiscal
2024 |  | 2023 |  | 2022
United States | $ | 18,119 |  |  | $ | 18,681 |  |  | $ | 20,990 |
Foreign | 1,287 |  |  | 1,243 |  |  | 1,487 |
Total | $ | 19,406 |  |  | $ | 19,924 |  |  | $ | 22,477 |
The following table presents our provision for income taxes:
in millions | Fiscal |  | Fiscal |  | Fiscal
2024 |  | 2023 |  | 2022
Current: |  |  |  |  |
Federal | $ | 3,417 |  |  | $ | 3,764 |  |  | $ | 3,918 |
State | 836 |  |  | 882 |  |  | 880 |
Foreign | 386 |  |  | 365 |  |  | 436 |
Total current | 4,639 |  |  | 5,011 |  |  | 5,234 |
Deferred: |  |  |  |  |
Federal | (67) |  |  | (228) |  |  | 102 |
State | 25 |  |  | 12 |  |  | 61 |
Foreign | 3 |  |  | (14) |  |  | (25) |
Total deferred | (39) |  |  | (230) |  |  | 138 |
Provision for income taxes | $ | 4,600 |  |  | $ | 4,781 |  |  | $ | 5,372 |
The following table presents our combined federal, state, and foreign effective tax rates:
| Fiscal |  | Fiscal |  | Fiscal
| 2024 |  | 2023 |  | 2022
Combined federal, state, and foreign effective tax rates | 23.7 | % |  | 24.0 | % |  | 23.9 | %
The following table presents the reconciliation of our provision for income taxes at the federal statutory rate of 21% to the actual tax expense:
in millions | Fiscal |  | Fiscal |  | Fiscal
2024 |  | 2023 |  | 2022
Income taxes at federal statutory rate | $ | 4,075 |  |  | $ | 4,184 |  |  | $ | 4,720 |
State income taxes, net of federal income tax benefit | 680 |  |  | 706 |  |  | 743 |
Other, net | (155) |  |  | (109) |  |  | (91) |
Total | $ | 4,600 |  |  | $ | 4,781 |  |  | $ | 5,372 |
Deferred Taxes The following table presents the tax effects of temporary differences that give rise to significant portions of our deferred tax assets and deferred tax liabilities:
in millions | February 2, 2025 |  | January 28, 2024
Assets: |  |  |
Deferred compensation | $ | 230 |  |  | $ | 237 |
Accrued self-insurance liabilities | 271 |  |  | 258 |
State income taxes | 133 |  |  | 209 |
Merchandise inventories | — |  |  | 110 |
Non-deductible reserves | 475 |  |  | 474 |
Net operating losses | 92 |  |  | 99 |
Lease liabilities | 2,255 |  |  | 2,034 |
Deferred revenue | 259 |  |  | 191 |
Other | 77 |  |  | 46 |
Total deferred tax assets | 3,792 |  |  | 3,658 |
Valuation allowance | (4) |  |  | (67) |
Total deferred tax assets, net of valuation allowance | 3,788 |  |  | 3,591 |
Liabilities: |  |  |
Merchandise inventories | (12) |  |  | — |
Property and equipment | (854) |  |  | (988) |
Goodwill and other intangibles (1) | (2,200) |  |  | (1,000) |
Lease right-of-use assets | (2,178) |  |  | (1,956) |
Tax on unremitted earnings | (54) |  |  | (53) |
Other | (183) |  |  | (144) |
Total deferred tax liabilities | (5,481) |  |  | (4,141) |
Net deferred tax liabilities | $ | (1,693) |  |  | $ | (550) |
————— (1) Increase year over year primarily results from the difference in book and tax basis related to identifiable intangible assets from the SRS acquisition (See Note 13). The following table presents our noncurrent deferred tax assets and noncurrent deferred tax liabilities, netted by tax jurisdiction, as presented on the consolidated balance sheets:
in millions | Consolidated Balance Sheet Classification |  | February 2, 2025 |  | January 28, 2024
Deferred tax assets | Other assets |  | $ | 269 |  |  | $ | 313 |
Deferred tax liabilities | Deferred income taxes |  | (1,962) |  |  | (863) |
Net deferred tax liabilities |  |  | $ | (1,693) |  |  | $ | (550) |
As of February 2, 2025, we recorded immaterial amounts for deferred tax assets for net operating losses as well as tax credits, primarily related to state jurisdictions. These losses and credits expire at various dates beginning in 2025 and 2026, respectively. We have concluded that it is more likely than not that tax benefits related to substantially all net operating losses and tax credits will be realized based upon the expectation that we will generate the necessary taxable income in future periods. The overall change in our valuation allowance was not material in fiscal 2024. Reinvestment of Unremitted Earnings Substantially all of our current year foreign cash earnings in excess of working capital and cash needed for strategic investments are not intended to be indefinitely reinvested offshore. Therefore, the tax effects of repatriation for applicable state taxes and foreign withholding taxes of such cash earnings have been provided for in the accompanying consolidated statements of earnings. We have the intent and ability to reinvest substantially all of the $5.1 billion of non-cash unremitted earnings of our non-U.S. subsidiaries indefinitely. Accordingly, no provision for state taxes or foreign withholding taxes was recorded on these unremitted earnings in the accompanying consolidated statements of earnings. It is impracticable for us to determine the amount of unrecognized deferred tax liabilities on these indefinitely reinvested earnings due to the complexities associated with the hypothetical calculation. Tax Return Examination Status Our income tax returns are routinely examined by U.S. federal, state and local, and foreign tax authorities. The Company remains subject to income tax examination for fiscal years 2015 through 2023. The IRS is currently examining our U.S. federal income tax returns for fiscal years 2016 through 2021. There are also ongoing U.S. state and local audits and other foreign audits covering fiscal years 2013 through 2022. We do not expect the results from any ongoing income tax audit to have a material impact on our consolidated financial condition, results of operations, or cash flows. Over the next twelve months, it is reasonably possible that the resolution of federal and state tax examinations, as well as the expiration of statutes of limitations, could reduce our unrecognized tax benefits by a n immaterial amount. We do not anticipate the resolution of these matters will result in a material change to our consolidated financial condition, results of operations, or cash flows. Unrecognized Tax Benefits The following table reconciles the beginning and ending amount of our gross unrecognized tax benefits:
in millions | Fiscal |  | Fiscal |  | Fiscal
2024 |  | 2023 |  | 2022
Unrecognized tax benefits balance at beginning of fiscal year | $ | 689 |  |  | $ | 643 |  |  | $ | 570 |
Additions based on tax positions related to the current year | 71 |  |  | 74 |  |  | 75 |
Additions for tax positions of prior years | 3 |  |  | 13 |  |  | 22 |
Reductions for tax positions of prior years | (42) |  |  | (14) |  |  | (7) |
Reductions due to settlements | (51) |  |  | — |  |  | (1) |
Reductions due to lapse of statute of limitations | (43) |  |  | (27) |  |  | (16) |
Unrecognized tax benefits balance at end of fiscal year | $ | 627 |  |  | $ | 689 |  |  | $ | 643 |
Unrecognized tax benefits that if recognized would affect our annual effective income tax rate on net earnings were $509 million, $568 million, and $537 million at February 2, 2025, January 28, 2024, and January 29, 2023, respectively. Interest and Penalties Interest and penalties associated with uncertain tax positions recognized in the consolidated statements of earnings were immaterial in fiscal 2024, fiscal 2023, and fiscal 2022. Our total accrued interest and penalties associated with uncertain tax positions were immaterial as of February 2, 2025 and January 28, 2024. Other In fiscal 2024, the IRS provided automatic income tax relief to taxpayers in certain southeastern states, extending the timeline to make certain tax payments. As a result, our fourth quarter fiscal 2024 estimated federal tax payment has been deferred to the first quarter of fiscal 2025, which reduced our cash paid for income taxes during fiscal 2024 and increased income taxes payable at February 2, 2025.

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