Visa 2007 Annual Report Download - page 142

Table of Contents
VISA U.S.A. INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 17—Income Taxes
Income tax (benefit) expense consists of:
For the Years Ended September 30
2007 2006 2005
(in thousands)
Current:
U.S. federal $ 519,825 $ 234,895 $ 161,761
State and local 37,962 (15,187) (60,295)
Total current taxes $ 557,787 $ 219,708 $ 101,466
Deferred:
U.S. federal (818,452) 33,750 (11,079)
State and local (55,328) (2,120) 92,909
Total deferred taxes (873,780) 31,630 81,830
Total income tax (benefit) expense $ (315,993) $ 251,338 $ 183,296
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:
At September 30
2007 2006
(in thousands)
Deferred tax assets:
Accrued compensation and benefits $ 30,851 $ 23,713
Investment securities, available-for-sale — 620
Adjustment to initially apply SFAS 158 (Note 12) 1,333 —
Investments in joint ventures 37,237 29,700
Accrued litigation 1,311,023 369,590
Volume and support incentives—non-member 11,365 14,992
Volume and support incentives—member 706 18,172
Other 10,562 20,795
Total gross deferred tax assets 1,403,077 477,582
Less valuation allowance — —
Deferred tax assets 1,403,077 477,582
Deferred tax liabilities:
Facilities, equipment and software, net (9,217) (14,098)
Investment in Visa International (100,296) (68,901)
Investments securities, available-for-sale (1,070) —
State tax (26,763) (7,313)
Other (92) (66)
Total gross deferred tax liabilities (137,438) (90,378)
Net deferred tax asset $ 1,265,639 $ 387,204
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