Taxes on Income

6 Months Ended

Jun. 30, 2025

Taxes on Income

Taxes on Income

16. Taxes on Income

The company’s effective tax rate was 22.8 percent and 22.9 percent for the three and six months ended June 30, 2025, respectively. As compared to the statutory U.S. tax rate, the effective tax rate for the three and six months ended June 30, 2025, increased by 0.8 and 0.9 percentage points, respectively, for non-U.S. rate differences and withholding taxes net of credits, increased by 0.7 and 0.9 percentage points, respectively, for state and local taxes, increased by 0.7 and 0.6 percentage points, respectively, for Pillar Two Global Minimum Taxes and decreased by 1.4 and 0.8 percentage points, respectively, for federal tax credits.

The company’s effective tax rate was 24.5 percent and 25.2 percent for the three and six months ended June 30, 2024, respectively. As compared to the statutory U.S. tax rate, the effective tax rate for the three and six months ended June 30, 2024, increased by 1.7 and 1.2 percentage points, respectively, for state and local taxes, increased by 1.1 and 1.5 percentage points, respectively, for non-U.S. rate differences and withholding taxes net of credits and increased by 0.7 and 0.8 percentage points, respectively, related to Pillar Two Global Minimum Taxes.

On July 4, 2025, the One Big Beautiful Bill Act (the Act) was signed into law. The Act changed U.S. income tax law by, among other things, allowing full expensing of qualified property, changing the calculation of interest expense deduction limitations and modifying certain elements of the international tax framework. The company is currently assessing the impact the Act will have on its consolidated financial statements, which we anticipate to begin reflecting in the third quarter of 2025.