XML 88 R16.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2019
Income Taxes [Abstract] |
Income Tax Disclosure [Text Block] | Income Taxes Income before income taxes is categorized geographically as follows:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
| (In thousands)
United States | $ | 452,793 |  |  | $ | 420,597 |  |  | $ | 313,351 |
Foreign | 305,983 |  |  | 308,919 |  |  | 285,661 |
Total income before income taxes | $ | 758,776 |  |  | $ | 729,516 |  |  | $ | 599,012 |
The provision for income taxes consisted of the following:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
| (In thousands)
Current expense: |  |  |  |  |
Federal | $ | 74,283 |  |  | $ | 99,127 |  |  | $ | 16,870 |
State | 2,069 |  |  | 1,088 |  |  | 294 |
Foreign, including withholding tax | 31,385 |  |  | 76,199 |  |  | 15,539 |
| 107,737 |  |  | 176,414 |  |  | 32,703 |
Deferred expense (benefit): |  |  |  |  |
Federal | 30,462 |  |  | (16,448 | ) |  | 90,113 |
State | 22,899 |  |  | 42,624 |  |  | 19,654 |
Foreign | (14,621 | ) |  | (55,563 | ) |  | (706 | )
| 38,740 |  |  | (29,387 | ) |  | 109,061 |
Total income tax expense | $ | 146,477 |  |  | $ | 147,027 |  |  | $ | 141,764 |
The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017, and most of its provisions became effective in 2018. The Tax Act made substantial changes to U.S. taxation of corporations, including, lowering the U.S. federal corporate income tax rate from 35% to 21%, and instituting a territorial tax system, along with a one-time Transition Tax. Federal current expense and federal deferred benefit for 2018 includes $96.4 million related to the Transition tax, net of $106.7 million of carried forward and newly-generated foreign tax credits, payable as a result of the Tax Act. This amount is being paid in installments over an eight-year period which began in 2018, as allowed by the Tax Act. The Transition Tax was recorded as a provisional deferred tax liability in 2017. State tax expense for 2018 was increased by $10.0 million remeasurement of deferred tax assets because of changes in certain state apportionment rates, and $5.6 million change in estimate related to the 2017 state income tax returns. Foreign current expense and foreign deferred benefit for 2019 and 2018 includes $13.1 million and $60.7 million, respectively, of withholding taxes paid upon the repatriation of cash held by foreign subsidiaries. The difference between income tax expense and the amount resulting from applying the federal statutory rate of 21% in 2019 and 2018, and 35% in 2017, to Income before income taxes is attributable to the following:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
| (In thousands)
Income tax expense at federal statutory rate | $ | 159,343 |  |  | $ | 153,199 |  |  | $ | 209,654 |
State taxes, net of federal benefit | 20,573 |  |  | 35,852 |  |  | 13,029 |
Effect of non-U.S. operations | (25,178 | ) |  | (26,271 | ) |  | (45,810 | )
Stock-based compensation | (9,204 | ) |  | (7,032 | ) |  | (5,375 | )
Capital loss carryforwards expiration | — |  |  | 769,706 |  |  | — |
Change in valuation allowance | (3,555 | ) |  | (773,737 | ) |  | (5,813 | )
Accrual for uncertain tax positions | 7,365 |  |  | 2,637 |  |  | 4,923 |
U.S. federal tax rate change | — |  |  | — |  |  | (186,800 | )
Transition tax, net of foreign tax credits | — |  |  | (5,602 | ) |  | 162,353 |
Other | (2,867 | ) |  | (1,725 | ) |  | (4,397 | )
Total income tax expense | $ | 146,477 |  |  | $ | 147,027 |  |  | $ | 141,764 |
The Company qualified for a tax holiday in Switzerland until the end of 2019 which lowered tax rates on certain types of income and required certain thresholds of foreign source income. The tax holiday reduced our foreign income tax expense by $17.3 million ($0.15 per share), $16.9 million ($0.14 per share), and $12.3 million ($0.10) in 2019, 2018, and 2017, respectively. The benefit from the tax holiday is calculated before consideration of any offsetting tax impact in the United States. Effective January 1, 2020, due to Swiss tax law changes, the tax holiday was eliminated, which was partially offset by a lowered statutory tax rate. The tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets and liabilities are as follows:
| As of December 31,
| 2019 |  | 2018
| (In thousands)
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 17,897 |  |  | $ | 40,729 |
Tax credit carryforwards | 5,516 |  |  | 3,970 |
Deferred revenues, accruals and reserves | 70,539 |  |  | 73,847 |
Other | 7,401 |  |  | 6,724 |
Total deferred tax assets | 101,353 |  |  | 125,270 |
Valuation allowance | (6,598 | ) |  | (10,153 | )
Net deferred tax assets | 94,755 |  |  | 115,117 |
Deferred tax liabilities: |  |  |
Property and equipment | (3,466 | ) |  | (2,764 | )
Other | (3,608 | ) |  | (7,495 | )
Total deferred tax liabilities | (7,074 | ) |  | (10,259 | )
Total net deferred tax assets | $ | 87,681 |  |  | $ | 104,858 |
With the exception of deferred tax assets related to certain state net operating loss carryforwards, management believes it is more likely than not that the tax effects of the deferred tax liabilities together with future taxable income, will be sufficient to fully recover the remaining deferred tax assets. As of December 31, 2019, the Company’s Other long-term tax liabilities include the $73.9 million noncurrent liability for Transition Tax, net of applicable foreign tax credits, while the $7.8 million current portion of the liability is included in Accounts payable and accrued liabilities. As of December 31, 2019, the Company’s deferred tax assets included $329.8 million of state net operating loss carryforwards, before applying tax rates for the respective jurisdictions. The tax credit carryforwards as of December 31, 2019 consisted primarily of state research tax credits, and foreign tax credit carryforwards. The net operating loss and federal tax credit carryforwards expire in various years from 2020 through 2034. The foreign tax credits will expire in 2028. The Company maintains liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored by management based on the best information available including changes in tax regulations and other information. A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:
| As of December 31,
| 2019 |  | 2018
| (In thousands)
Beginning balance | $ | 223,455 |  |  | $ | 223,216 |
Increases in tax positions for prior years | 4,467 |  |  | 333 |
Decreases in tax positions for prior years | (328 | ) |  | (196 | )
Increases in tax positions for current year | 3,745 |  |  | 436 |
Lapse in statute of limitations | — |  |  | (334 | )
Ending balance | $ | 231,339 |  |  | $ | 223,455 |
As of December 31, 2019, approximately $229.2 million of unrecognized tax benefits, including penalties and interest, could affect the Company’s tax provision and effective tax rate. It is reasonably possible that during the next twelve months, the Company’s unrecognized tax benefits may change by a significant amount as a result of IRS audits. However, the timing of completion and ultimate outcome of the audits remains uncertain. Therefore, the Company cannot currently estimate the impact on the balance of unrecognized tax benefits. In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. These accruals were not material in any period presented. The Company’s major taxing jurisdictions are the U.S., the state of Virginia, and Switzerland. The Company’s U.S. federal income tax returns are currently under examination by the IRS for 2010 through 2014. The Company’s other material tax returns are not currently under examination by their respective taxing jurisdictions. Because the Company has previously used net operating loss carryforwards and other tax attributes to offset its taxable income in income tax returns for the U.S. and Virginia, such attributes can be adjusted by these taxing authorities until the statute closes on the year in which such attributes were utilized. The open years for examination in Switzerland are the 2012 tax year and forward.

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Income Taxes [Abstract] + References No definition available. + Details
Name: | vrsn_IncomeTaxesAbstract
Namespace Prefix: | vrsn_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration