XML 39 R23.htm IDEA: XBRL DOCUMENT
v3.20.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2020
Income Taxes |
Income taxes | NOTE 16 – INCOME TAXES ​ The following table identifies components of income from continuing operations before income taxes included in “Income before income taxes” on the accompanying Consolidated Statements of Income for the years ended December 31, 2020, 2019 and 2018 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Year Ended
​ | ​ | December 31,
​ | ​ | 2020 | ​ | 2019 | ​ | 2018
Domestic | ​ | $ | 2,260,385 | ​ | $ | 1,790,207 | ​ | $ | 1,694,087
International | ​ | ​ | 6,020 | ​ | ​ | 122 | ​ | ​ | —
Income before income taxes | ​ | $ | 2,266,405 | ​ | $ | 1,790,329 | ​ | $ | 1,694,087
​ Provision for income taxes: The following tables reconcile the amounts included in “Provision for income taxes” on the accompanying Consolidated Statements of Income for the years ended December 31, 2020, 2019 and 2018 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Year Ended
​ | ​ | December 31,
​ |  | 2020 |  | 2019 |  | 2018
Current: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal income tax expense | ​ | $ | 401,331 | ​ | $ | 315,061 | ​ | $ | 289,953
State income tax expense | ​ |  | 97,085 | ​ |  | 62,795 | ​ |  | 59,487
International income tax expense | ​ | ​ | 3,306 | ​ | ​ | 273 | ​ | ​ | —
Total current | ​ | ​ | 501,722 | ​ | ​ | 378,129 | ​ | ​ | 349,440
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal income tax expense | ​ | ​ | 16,749 | ​ | ​ | 19,367 | ​ | ​ | 16,309
State income tax (benefit) expense | ​ | ​ | (2,865) | ​ | ​ | 2,027 | ​ | ​ | 3,851
International income tax benefit | ​ | ​ | (1,503) | ​ | ​ | (236) | ​ | ​ | —
Total deferred | ​ | ​ | 12,381 | ​ | ​ | 21,158 | ​ | ​ | 20,160
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income tax expense | ​ | $ | 514,103 | ​ | $ | 399,287 | ​ | $ | 369,600
​ The following table outlines the reconciliation of the “Provision for income taxes” amounts included on the accompanying Consolidated Statements of Income to the amounts computed at the federal statutory rate for the years ended December 31, 2020, 2019 and 2018 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Year Ended
​ | ​ | December 31,
​ |  | 2020 |  | 2019 |  | 2018
Federal income taxes at statutory rate | ​ | $ | 474,681 | ​ | $ | 375,942 | ​ | $ | 355,758
State income taxes, net of federal tax benefit | ​ |  | 76,810 | ​ |  | 54,739 | ​ |  | 56,345
Excess tax benefit from share-based compensation | ​ |  | (16,918) | ​ |  | (25,992) | ​ |  | (34,703)
Revaluation of deferred tax liability | ​ |  | — | ​ |  | — | ​ |  | (1,262)
Benefit from investment in renewable energy tax credits | ​ | ​ | (17,904) | ​ | ​ | (875) | ​ | ​ | (2,037)
Other items, net | ​ |  | (2,566) | ​ |  | (4,527) | ​ |  | (4,501)
Total provision for income taxes | ​ | $ | 514,103 | ​ | $ | 399,287 | ​ | $ | 369,600
​ The U.S. Tax Cuts and Jobs Act, enacted in December 2017 (the “Tax Act”), significantly reduced the federal corporate income tax rate for tax years beginning in 2018 and required the Company to revalue its deferred income tax liabilities. During the year ended December 31, 2018, the Company completed its evaluation of the impact of the Tax Act and recorded a one-time benefit of $1.3 million, finalizing the revaluation of its deferred income tax liabilities due to the Tax Act, which was recorded in “Provision for income taxes” on the accompanying Consolidated Statements of Income for the year ended December 31, 2018. ​ The Company has invested in tax credit equity investments for the purposes of receiving renewable energy tax credits. During the years ended December 31, 2020, 2019 and 2018, the Company recognized investment tax credits in the amount of $170.5 million, $8.5 million and $19.4 million, respectively, all of which were realized through reductions in cash income taxes paid and were reflected as a component of the change in Income taxes payable on the accompanying Consolidated Statements of Cash Flows for the respective years. See Note 1 for further information concerning the Company’s investment in tax credit funds. ​ Deferred income tax assets and liabilities: Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and also include the tax effect of carryforwards. ​ The following table identifies significant components of the Company’s net deferred tax liabilities included in “Deferred income taxes” on the accompanying Consolidated Balance Sheets as of December 31, 2020 and 2019 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31,
​ |  | 2020 |  | 2019
Deferred tax assets: |  | ​ |  |  | ​ |
Allowance for doubtful accounts | ​ | $ | 1,574 | ​ | $ | 2,008
Tax credits | ​ |  | 1,444 | ​ |  | 3,417
Other accruals | ​ |  | 143,387 | ​ |  | 97,189
Operating lease liability | ​ | ​ | 513,134 | ​ | ​ | 494,093
Other | ​ |  | 16,594 | ​ |  | 15,732
Total deferred tax assets | ​ |  | 676,133 | ​ |  | 612,439
​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred tax liabilities: | ​ |  |  | ​ |  |
Inventories | ​ |  | 79,326 | ​ |  | 65,346
Property and equipment | ​ |  | 194,000 | ​ |  | 162,613
Operating lease asset | ​ | ​ | 498,042 | ​ | ​ | 479,821
Other | ​ |  | 60,664 | ​ |  | 37,939
Total deferred tax liabilities | ​ |  | 832,032 | ​ |  | 745,719
​ | ​ | ​ | ​ | ​ | ​ | ​
Net deferred tax liabilities | ​ | $ | (155,899) | ​ | $ | (133,280)
​ As of December 31, 2020, the Company had tax credit carryforwards available for state tax purposes, net of federal impact, in the amount of $1.4 million, which generally expire in 2024. ​ Unrecognized tax benefits: The following table summarizes the changes in the gross amount of unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2020, 2019 and 2018 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2020 |  | 2019 |  | 2018
Unrealized tax benefit, balance at January 1, | ​ | $ | 31,475 | ​ | $ | 33,766 | ​ | $ | 35,388
Additions based on tax positions related to the current year | ​ |  | 4,795 | ​ |  | 4,627 | ​ |  | 3,550
Additions based on tax positions related to prior years | ​ |  | — | ​ |  | — | ​ |  | 4,255
Payments related to items settled with taxing authorities | ​ |  | — | ​ |  | (443) | ​ |  | (2,792)
Reductions due to the lapse of statute of limitations and settlements | ​ |  | (5,303) | ​ |  | (6,475) | ​ |  | (6,635)
Unrealized tax benefit, balance at December 31, | ​ | $ | 30,967 | ​ | $ | 31,475 | ​ | $ | 33,766
​ For the years ended December 31, 2020, 2019 and 2018, the Company recorded a reserve for unrecognized tax benefits, including interest and penalties, in the amounts of $35.9 million, $36.6 million and $38.9 million, respectively. All of the unrecognized tax benefits recorded as of December 31, 2020, 2019 and 2018, respectively, would affect the Company’s effective tax rate if recognized, generally net of the federal tax effect of approximately $7.5 million. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2020, 2019 and 2018, the Company had accrued approximately $5.0 million, $5.1 million and $5.1 million, respectively, of interest and penalties related to uncertain tax positions before the benefit of the deduction for interest on state and federal returns. During the years ended December 31, 2020, 2019 and 2018, the Company recorded tax expense related to an increase in its liability for interest and penalties in the amounts of $2.2 million, $2.7 million and $2.3 million, respectively. Although unrecognized tax benefits for individual tax positions may increase or decrease during 2021, the Company expects a reduction of $6.0 million of unrecognized tax benefits during the one-year period subsequent to December 31, 2020, resulting from settlement or expiration of the statute of limitations. ​ The Company’s United States federal income tax returns for tax years 2017 and beyond remain subject to examination by the Internal Revenue Service (“IRS”). The IRS concluded an examination of the O’Reilly consolidated 2014, 2015 and 2016 federal income tax returns in the third quarter of 2018. The Company’s state income tax returns remain subject to examination by various state authorities for tax years ranging from 2009 through 2019.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration