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Recording Income Tax Expense

Nike, Inc., reports the following tax information in the notes to its $2020$ financial report. Income before income taxes is as follows:

Year Ended May $31($In millions$)$

Income before income taxes:

$2020,2019,2018$

United States

$$3,013$ $$605$ $$759$

Foreign

$(68)4,2923,653$

Total income before income taxes

$$3,004$ $$4,995$ $$4,500$

The provision for income taxes is as follows:

Year Ended May $31($In millions$)$

$202020192018$

Current:

United States

Federal $$(111)$ $$75$ $$1,190$

State $835746$

Foreign $771620544$

Total current $7437521,780$

Deferred:

United States

Federal $(236)(34)607$

State $(48)(9)26$

Foreign $(104)7828$

Total deferred $(388)35661$

Total income tax $$355$ $$787$ $$2,441$

The effective tax rate for the fiscal year ended May $31,2020,$ was lower than the effective tax rate for the fiscal year ended May $31,2019,$ due to increased benefits from discrete items such as stock$-$based compensation. The foreign earnings rate impact shown above for the fiscal year ended May $31,2020,$ includes withholding taxes of $6\mathrm{.}5\%$ and held for sale accounting items of $2\mathrm{.}9\%,$ offset by a benefit for statutory rate differences and other items of $3\mathrm{.}5\%.$The foreign derived intangible income benefit reflects U$.$S$.$ tax benefits introduced by the Tax Act for companies serving foreign markets. This benefit became available to the Company as a result of a restructuring of its intellectual property interests. Income tax audit and contingency reserves reflect benefits associated with the modification of the treatment of certain research and development expenditures of $2\mathrm{.}9\%$ offset by an increase related to the resolution of an audit by the U$.$S$.$ Internal Revenue Service $($IRS$)$ and other matters of $1\mathrm{.}5\%.$ Included in other is the deferral of income tax effects related to intra$-$entity transfers of inventory of $2\mathrm{.}3\%$ and other items of $0\mathrm{.}6\%.$

Nike also states the following:

Record Nike$$s provision for income taxes for $2020.$

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