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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2019
Income Taxes |
Provision for Income Taxes | Our income tax expense consisted of the following for the years ended December 31 (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2019 |  | 2018 |  | 2017
Current: |  | ​ |  |  | ​ |  |  | ​ |
Federal | ​ | $ | 204 | ​ | $ | 256 | ​ | $ | 400
State | ​ |  | 94 | ​ |  | 132 | ​ |  | 56
Foreign | ​ |  | 36 | ​ | ​ | 40 | ​ | ​ | 37
​ | ​ |  | 334 | ​ | ​ | 428 | ​ | ​ | 493
Deferred: | ​ |  |  | ​ | ​ |  | ​ | ​ |
Federal | ​ |  | 94 | ​ | ​ | 59 | ​ | ​ | (316)
State | ​ |  | 8 | ​ | ​ | (32) | ​ | ​ | 62
Foreign | ​ |  | (2) | ​ | ​ | (2) | ​ | ​ | 3
​ | ​ |  | 100 | ​ | ​ | 25 | ​ | ​ | (251)
Income tax expense | ​ | $ | 434 | ​ | $ | 453 | ​ | $ | 242
U.S. Federal Statutory Income Tax Rate Reconciled to Effective Rate | The U.S. federal statutory income tax rate is reconciled to the effective income tax rate for the years ended December 31 as follows:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2019 |  |  | 2018 |  | ​ | 2017 |
Income tax expense at U.S. federal statutory rate |  | 21.00 | % |  | 21.00 | % | ​ | 35.00 | %
State and local income taxes, net of federal income tax benefit |  | 4.39 |  |  | 4.41 |  | ​ | 3.25 | ​
Impacts of enactment of tax reform |  | — |  |  | (0.51) |  | ​ | (24.14) | ​
Federal tax credits |  | (4.38) |  |  | (2.44) |  | ​ | (2.31) | ​
Taxing authority audit settlements and other tax adjustments |  | (0.74) |  |  | (3.85) |  | ​ | 0.03 | ​
Tax impact of equity-based compensation transactions |  | (0.91) |  |  | (0.54) |  | ​ | (1.45) | ​
Tax impact of impairments |  | 0.72 |  |  | 0.03 |  | ​ | 0.66 | ​
Tax rate differential on foreign income |  | 0.40 |  |  | 0.43 |  | ​ | (0.55) | ​
Other |  | 0.13 |  |  | 0.51 |  | ​ | 0.55 | ​
Effective income tax rate |  | 20.61 | % |  | 19.04 | % | ​ | 11.04 | %
Summary of income source | For financial reporting purposes, income before income taxes by source for the years ended December 31 was as follows (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2019 |  | 2018 |  | 2017
Domestic | ​ | $ | 2,025 | ​ | $ | 2,235 | ​ | $ | 2,040
Foreign (a) | ​ |  | 80 | ​ | ​ | 141 | ​ | ​ | 151
Income before income taxes | ​ | $ | 2,105 | ​ | $ | 2,376 | ​ | $ | 2,191
(a) | Foreign income before income taxes for the year ended December 31, 2019 includes a $52 million impairment charge related to our minority-owned investment in a waste conversion technology business. See Note 12 for further discussion.
Components of Net Deferred Tax Assets (Liabilities) | The components of net deferred tax liabilities as of December 31 are as follows (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2019 |  | 2018
Deferred tax assets: |  | ​ |  |  | ​ |
Net operating loss, capital loss and tax credit carry-forwards | ​ | $ | 150 | ​ | $ | 258
Landfill and environmental remediation liabilities | ​ |  | 156 | ​ |  | 143
Operating lease liabilities | ​ |  | 114 | ​ |  | —
Miscellaneous and other reserves, net | ​ |  | 150 | ​ |  | 175
Subtotal | ​ |  | 570 | ​ |  | 576
Valuation allowance | ​ |  | (162) | ​ |  | (261)
Deferred tax liabilities: | ​ |  |  | ​ |  |
Property and equipment | ​ |  | (842) | ​ |  | (752)
Goodwill and other intangibles | ​ |  | (865) | ​ |  | (854)
Operating lease right-of-use assets | ​ |  | (108) | ​ |  | —
Net deferred tax liabilities | ​ | $ | (1,407) | ​ | $ | (1,291)
Summary of unrecognized tax benefits | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, including accrued interest, is as follows (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2019 |  | 2018 |  | 2017
Balance as of January 1 | ​ | $ | 36 | ​ | $ | 109 | ​ | $ | 82
Additions based on tax positions related to the current year | ​ |  | 5 | ​ |  | 6 | ​ |  | 19
Additions based on tax positions of prior years | ​ |  | — | ​ |  | 12 | ​ |  | 11
Accrued interest | ​ |  | 2 | ​ |  | 2 | ​ |  | 4
Settlements | ​ |  | — | ​ |  | (88) | ​ |  | (1)
Lapse of statute of limitations | ​ |  | (3) | ​ |  | (5) | ​ |  | (6)
Balance as of December 31 | ​ | $ | 40 | ​ | $ | 36 | ​ | $ | 109

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