Nordstrom 2015 Annual Report Download - page 59

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Income tax expense consists of the following:
Fiscal year 2015 2014 2013
Current income taxes:
Federal $202 $397 $379
State and local 32 61 64
Total current income tax expense 234 458 443
Deferred income taxes:
Federal 123 9 9
State and local 23 2 3
Foreign (4)(4)…
Total deferred income tax expense 142 7 12
Total income tax expense $376 $465 $455
A reconciliation of the statutory federal income tax rate to the effective tax rate on earnings before income taxes is as follows:
Fiscal year 2015 2014 2013
Statutory rate 35.0%35.0%35.0%
State and local income taxes, net of federal income taxes 4.1%3.8%3.6%
Non-deductible acquisition-related items 0.4%0.9%…%
Federal credits (0.6%) (0.2%) (0.1%)
Other, net (0.3%) (0.3%) (0.2%)
Effective tax rate 38.6%39.2%38.3%
Tax adjustments related to a reassessment of our deferred tax assets related to acquisitions resulted in a higher effective tax rate in 2014.
The components of deferred tax assets and liabilities are as follows:
January 30, 2016 January 31, 2015
Compensation and benefits accruals $194 $191
Allowance for sales returns 73 62
Credit card receivable transaction 28 …
Accrued expenses 48 51
Allowance for credit losses 129
Merchandise inventories 35 31
Gift cards 29 23
Gain on sale of interest rate swap 912
Nordstrom Notes 24 22
Federal benefit of state taxes 43
Other 13 4
Total deferred tax assets 458 428
Valuation allowance (1)…
Total net deferred tax assets 457 428
Land, property and equipment basis and depreciation differences (301)(116)
Debt exchange premium (23)(22)
Total deferred tax liabilities (324)(138)
Net deferred tax assets $133 $290
Table of Contents
Nordstrom, Inc.
Notes to Consolidated Financial Statements
Dollar and share amounts in millions except per share, per option and per unit amounts
Nordstrom, Inc. and subsidiaries 59