Target 2010 Annual Report Download - page 74

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Certain discrete state tax items reduced the impact of the state income tax rate, net of federal benefit, by
2.4 percentage points, 0.7 percentage points, and 0.6 percentage points in 2010, 2009, and 2008, respectively.
Provision for Income Taxes
(millions) 2010 2009 2008
Current:
Federal $1,086 $ 877 $1,034
State/other 44 143 197
Total current 1,130 1,020 1,231
Deferred:
Federal 388 339 88
State/other 57 25 3
Total deferred 445 364 91
Total provision $1,575 $1,384 $1,322
Net Deferred Tax Asset/(Liability) January 29, January 30,
(millions) 2011 2010
Gross deferred tax assets:
Accrued and deferred compensation $ 451 $ 538
Allowance for doubtful accounts 229 393
Accruals and reserves not currently deductible 373 380
Self-insured benefits 251 260
Other 67 92
Total gross deferred tax assets 1,371 1,663
Gross deferred tax liabilities:
Property and equipment (1,607) (1,543)
Deferred credit card income (145) (166)
Other (174) (64)
Total gross deferred tax liabilities (1,926) (1,773)
Total net deferred tax asset/(liability) $ (555) $ (110)
We file a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. We
are no longer subject to U.S. federal income tax examinations for years before 2009 and, with few exceptions, are
no longer subject to state and local or non-U.S. income tax examinations by tax authorities for years before 2003.
Reconciliation of Unrecognized Tax Benefit Liabilities
(millions) 2010 2009
Balance at beginning of period $ 452 $434
Additions based on tax positions related to the current year 16 119
Additions for tax positions of prior years 68 47
Reductions for tax positions of prior years (222) (61)
Settlements (12) (87)
Balance at end of period $ 302 $452
If the Corporation were to prevail on all unrecognized tax benefit liabilities recorded, approximately $198 million
of the $302 million reserve would benefit the effective tax rate. In addition, the reversal of accrued penalties and
interest would also benefit the effective tax rate. Interest and penalties associated with unrecognized tax benefit
liabilities are recorded within income tax expense. During the years ended January 29, 2011 and January 30, 2010,
we recorded a net benefit from the reversal of accrued penalties and interest of approximately $28 million and
$10 million, respectively. During the year ended January 31, 2009, we recorded a net expense for accrued penalties
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