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Income Taxes | 12 Months Ended
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Jan. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The provision for income taxes consists of the following:
| Fiscal year ended January 31,
2021 |  | 2020 |  | 2019
Federal: |  |  |  |  |
Current | $ | 9.8 |  |  | $ | (2.3) |  |  | $ | (13.3) |
Deferred | (741.0) |  |  | 7.6 |  |  | (6.7) |
State: |  |  |  |  |
Current | 19.0 |  |  | (0.4) |  |  | (1.8) |
Deferred | (57.5) |  |  | 2.1 |  |  | 0.1 |
Foreign: |  |  |  |  |
Current | 87.6 |  |  | 69.6 |  |  | 65.3 |
Deferred | 20.6 |  |  | 3.7 |  |  | (5.5) |
Income tax provision (benefit) | $ | (661.5) |  |  | $ | 80.3 |  |  | $ | 38.1 |
Foreign pretax income was $527.8 million in fiscal 2021, $475.5 million in fiscal 2020, and $181.4 million in fiscal 2019. The differences between the U.S. statutory rate and the aggregate income tax provision are as follows:
| Fiscal year ended January 31,
2021 |  | 2020 |  | 2019
Income tax provision (benefit) at U.S. Federal statutory rate | $ | 114.8 |  |  | $ | 61.9 |  |  | $ | (9.0) |
State income tax benefit, net of the U.S. Federal benefit | (7.9) |  |  | (5.3) |  |  | (11.4) |
Foreign income taxed at rates different from the U.S. statutory rate | (15.7) |  |  | (41.2) |  |  | 117.8 |
Valuation allowance adjustment | (661.7) |  |  | 65.3 |  |  | 18.8 |
Transition tax and revisions due to subsequent regulations |  |  | 9.6 |  |  | (16.0) |
Tax effect of non-deductible stock-based compensation | 20.4 |  |  | 24.9 |  |  | 7.6 |
Stock compensation windfall / shortfall | (35.4) |  |  | (22.4) |  |  | (39.4) |
Research and development tax credit benefit | (22.1) |  |  | (19.8) |  |  | (23.5) |
Closure of income tax audits and changes in uncertain tax positions | — |  |  | (2.0) |  |  | (12.7) |
Tax effect of officer compensation in excess of $1.0 million | 4.6 |  |  | 3.4 |  |  | 5.0 |
Non-deductible expenses | 2.3 |  |  | 5.4 |  |  | 1.5 |
Global intangible low-taxed income, foreign derived intangible income | (65.0) |  |  | — |  |  | — |
Other | 4.2 |  |  | 0.5 |  |  | (0.6) |
Income tax provision (benefit) | $ | (661.5) |  |  | $ | 80.3 |  |  | $ | 38.1 |
Autodesk’s fiscal 2021 tax benefit is primarily driven by the U.S. valuation allowance release, excess tax benefits from share-based compensation and a permanent tax benefit from foreign derived intangible income in the U.S., offset by tax expense in foreign locations, including withholding taxes on payments made to the United States or to Singapore from foreign sources. Significant components of Autodesk’s deferred tax assets and liabilities are as follows:
| January 31,
2021 |  | 2020
Stock-based compensation | $ | 39.0 |  |  | $ | 32.8 |
Research and development tax credit carryforwards | 220.4 |  |  | 263.4 |
Foreign tax credit carryforwards | 69.9 |  |  | 253.9 |
Accrued compensation and benefits | 3.4 |  |  | 3.4 |
Other accruals not currently deductible for tax | 14.1 |  |  | 28.4 |
Purchased technology and capitalized software | 48.2 |  |  | 37.7 |
Fixed assets | 8.1 |  |  | 11.6 |
Lease liability | 114.2 |  |  | 106.4 |
Tax loss carryforwards | 65.5 |  |  | 241.2 |
Deferred revenue | 501.5 |  |  | 29.2 |
Other | 40.2 |  |  | 28.0 |
Total deferred tax assets | 1,124.5 |  |  | 1,036.0 |
Less: valuation allowance | (186.5) |  |  | (883.4) |
Net deferred tax assets | 938.0 |  |  | 152.6 |
Indefinite lived intangibles | (83.1) |  |  | (76.5) |
Right-of-use assets | (101.6) |  |  | (101.3) |
Unremitted earnings of foreign subsidiaries | (1.6) |  |  | (0.9) |
Total deferred tax liabilities | (186.3) |  |  | (178.7) |
Net deferred tax assets (liabilities) | $ | 751.7 |  |  | $ | (26.1) |
Autodesk regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, Autodesk evaluates whether it is more likely than not that some or all of the deferred tax assets will not be realized based on all available positive and negative evidence. In evaluating the need for a valuation allowance, prior to fiscal 2021 Autodesk considered global cumulative losses arising from the Company’s business model transition as a significant piece of negative evidence. During fiscal 2021 Autodesk has recognized cumulative earnings on a global basis and is profitable in the U.S.. Autodesk forecasts cumulative earnings in U.S. jurisdiction in fiscal 2022. In the fourth quarter of fiscal 2021, Autodesk released the valuation allowance against the Company’s U.S. deferred tax assets, due to positive evidence indicating that these deferred tax assets are more likely than not to be realized. The Company has retained a valuation allowance against California deferred tax assets and deferred tax assets that will convert into a capital loss upon reversal as we do not have sufficient income of the appropriate character to benefit these deferred tax assets. The Company continues to retain a valuation allowance of $65 million against foreign deferred tax assets in the Netherlands and Canada as of January 31, 2021. The valuation allowance decreased by $696.9 million in fiscal 2021 primarily due to the U.S. valuation allowance release of $679.0 million. The valuation allowance increased by $85.6 million and $163.6 million in fiscal 2020 and fiscal 2019, respectively, primarily related to the generation of deferred tax attributes, net of the fiscal 2020 valuation allowance release of $42.0 million in Singapore. The U.S. Tax Cuts and Jobs Act (“TCJA”) provided broad and significant changes to the U.S. corporate income tax regime and reduced the statutory federal corporate rate from 35% to 21% for fiscal 2018 and forward. TCJA subjects the deemed intangible income of our foreign subsidiaries to current U.S. taxation (commonly referred to as “GILTI”), provides for a full dividends received deduction upon repatriation of untaxed earnings of our foreign subsidiaries, imposes a minimum taxation (without most tax credits) on modified taxable income, which is generally taxable income without deductions for payments to related foreign companies (commonly referred to as “BEAT”), modifies the accelerated depreciation deduction rules, and revises the deductibility of certain expenses. The Company has elected to recognize any potential GILTI obligations as an expense in the period it is incurred. We anticipate that the U.S. Department of Treasury and other standard-setting bodies will continue to interpret or issue guidance on how provisions of the TCJA will be applied or otherwise administered. As future guidance is issued, we may make adjustments to amounts that we have previously recorded that may materially impact our financial statements in the period in which the adjustments are made. As of January 31, 2021, Autodesk had $8.8 million of cumulative U.S. federal tax loss carryforwards and $560.4 million of cumulative U.S. state tax loss carryforwards, which may be available to reduce future income tax liabilities in federal and state jurisdictions. The pre-fiscal 2019 U.S. federal tax loss carryforward will expire beginning fiscal 2035 through fiscal 2039. U.S. federal losses generated beginning in fiscal 2019 do not expire and are carried forward indefinitely. The U.S. state tax loss carryforward will expire beginning fiscal 2025 through fiscal 2041. In addition to U.S. federal and state tax loss carryforwards, the Netherlands, Norway, Singapore, and other foreign jurisdictions incurred federal tax losses totaling $222.0 million, which may be available to reduce future income tax liabilities. Our Norway and Singaporean losses, of $22.5 million and $156.4 million, respectively, have an indefinite expiration period. The Netherlands losses of $40.0 million will expire beginning in fiscal 2025 through fiscal 2027, and have a full valuation allowance against them on our balance sheet as the Company has determined it is more likely than not that these losses will not be utilized. As of January 31, 2021, Autodesk had $166.8 million of cumulative U.S. federal research tax credit carryforwards, $97.3 million of cumulative California state research tax credit carryforwards, and $56.8 million and $1.6 million of cumulative Canadian federal research and Ontario minimum tax credit carryforwards, respectively, which may be available to reduce future income tax liabilities in the respective jurisdictions. The federal research tax credit carryforwards will expire beginning fiscal 2026 through fiscal 2041, the state research tax credit carryforwards may reduce future California income tax liabilities indefinitely, and the Canadian research tax credit carryforwards will expire beginning fiscal 2028 through fiscal 2041. Autodesk also has $112.2 million of cumulative U.S. federal foreign tax credit carryforwards, which may be available to reduce future U.S. tax liabilities. These foreign tax credits will expire beginning fiscal 2025 through fiscal 2030. As discussed above, the California and Canada cumulative assets have full valuation allowance against them on our balance sheet as the Company has determined it is more likely than not that these losses and credits will not be utilized. Utilization of net operating losses and tax credits may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code and similar state provisions. This annual limitation may result in the expiration of net operating losses and credits before utilization. No ownership change has occurred through the balance sheet date that would result in permanent losses of the U.S. federal and state tax attributes. As of January 31, 2021, the Company had $198.0 million of gross unrecognized tax benefits, of which $31.7 million would reduce our valuation allowance, if recognized. The remaining $166.3 million would impact the effective tax rate. It is possible that the amount of unrecognized tax benefits will decrease in the next 12 months for an audit settlement of approximately $8.2 million. A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits is as follows:
| Fiscal Year Ended January 31,
| 2021 |  | 2020 |  | 2019
Gross unrecognized tax benefits at the beginning of the fiscal year | $ | 220.6 |  |  | $ | 209.0 |  |  | $ | 337.6 |
Increases for tax positions of prior years | 12.7 |  |  | 2.8 |  |  | 7.9 |
Decreases for tax positions of prior years | (41.1) |  |  | (0.4) |  |  | (146.3) |
Increases for tax positions related to the current year | 6.4 |  |  | 11.1 |  |  | 10.3 |
Decreases relating to settlements with taxing authorities | — |  |  | — |  |  | — |
Reductions as a result of lapse of the statute of limitations | (0.6) |  |  | (1.9) |  |  | (0.5) |
Gross unrecognized tax benefits at the end of the fiscal year | $ | 198.0 |  |  | $ | 220.6 |  |  | $ | 209.0 |
It is the Company’s continuing practice to recognize interest and/or penalties related to income tax matters in income tax expense. Autodesk had $4.5 million, $2.3 million, and $3.1 million, net of tax benefit, accrued for interest and penalties related to unrecognized tax benefits as of January 31, 2021, 2020, and 2019, respectively. There was $2.2 million, $(0.8) million, and $0.3 million of net expense for interest and penalties related to tax matters recorded through the consolidated statements of operations for the years ended January 31, 2021, 2020, and 2019, respectively. Autodesk’s U.S. and state income tax returns for fiscal 2002 through fiscal 2021 remain open to examination due to either net operating loss or credit carryforward. The Internal Revenue Service has examined the Company’s U.S. consolidated federal income tax returns for fiscal 2014 and 2015. This audit was finalized on January 31, 2019, and impacts from the finalization of the audit were recorded in the fiscal 2019 financial statements. Autodesk files tax returns in multiple foreign taxing jurisdictions with open tax years ranging from fiscal 2005 to 2021. As a result of certain business and employment actions and capital investments undertaken by Autodesk, income earned in certain European and Asia Pacific countries was subject to reduced tax rates through fiscal 2019. Historically, the Company incurred $0.0 million net benefit ($0.00 basic net income per share) in fiscal 2021 and fiscal 2020 from the tax status of these business arrangements, and $11.4 million ($0.05 basic net income per share) in fiscal 2019.

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- 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
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