Quarterly report pursuant to Section 13 or 15(d)

Income Taxes (Notes)

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Income Taxes (Notes)
9 Months Ended
Jun. 27, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
We estimate our annual effective income tax rate to be 11% for fiscal 2021, which is lower than the U.S. federal statutory rate, primarily due to a significant portion of our income qualifying for preferential treatment as foreign-derived intangible income (FDII) at a 13% effective tax rate, excess tax benefits associated with share-based awards and benefits from our federal research and development tax credit. The effective tax rate of 10% for the third quarter of fiscal 2021 was lower than the estimated annual effective tax rate of 11% primarily due to $64 million of discrete net tax benefits recorded in the third quarter of fiscal 2021, which principally related to excess tax benefits associated with share-based awards that vested in the third fiscal quarter. The effective tax rate of 3% for the third quarter of fiscal 2020 included benefits recorded in the third quarter of fiscal 2020, which principally related to certain releases of our valuation allowance on capital losses, a higher FDII deduction and foreign tax credit utilization.
Unrecognized tax benefits were $2.0 billion and $1.9 billion at June 27, 2021 and September 27, 2020, respectively, and primarily related to our refund claim of Korean withholding tax. If successful, the refund will result in a corresponding reduction in U.S. foreign tax credits. We expect that the total amount of unrecognized tax benefits at June 27, 2021 will increase in the next 12 months as licensees in Korea continue to withhold taxes on future payments due under their licensing agreements at a rate higher than we believe is owed; such increase is not expected to have a significant impact on our income tax provision.