Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes Our income tax expense and resulting effective tax rate are based upon the estimated annual effective tax rates applicable for the respective periods adjusted for the effect of items required to be treated as discrete in the interim periods. This estimated annual effective tax rate is affected by the relative proportions of revenue and income before taxes in the jurisdictions in which we operate. Based on the geographical mix of earnings, our annual effective tax rate fluctuates based on the portion of our profits earned in each jurisdiction. The effective tax rates for the quarters ended June 30, 2025 and 2024 were 25.5% and 26.7%, respectively. The effective tax rate for the quarters ended June 30, 2025 and June 30, 2024 are higher than the U.S. Federal tax rate primarily driven by higher tax rates in most foreign jurisdictions and state tax on domestic earnings partially offset by various tax credits. The effective tax rates for the six months ended June 30, 2025 and 2024 were 24.9% and 22.7%, respectively. The effective tax rate for the six months ended June 30, 2025 is higher than the U.S. Federal tax rate primarily driven by higher tax rates in most foreign jurisdictions and state tax on domestic earnings partially offset by various tax credits. The effective tax rate for the six months ended June 30, 2024 is higher than the U.S. Federal tax rate primarily driven by higher tax rates in most foreign jurisdictions partially offset by favorable state amended return filings and additional tax benefit related to share-based payment awards. The Organization for Economic Co-operation and Development (the “OECD”) has introduced a framework to implement a global minimum corporate tax of 15%, referred to as Pillar Two, that is effective for tax years beginning in 2024. While it is uncertain whether the United States will enact legislation to adopt Pillar Two, certain countries in which we operate have adopted legislation to enact Pillar Two. The adoption of Pillar Two has had no impact on our income tax expense for the six months ended June 30, 2025 and the six months ended June 30, 2024 and we expect there to be minimal impact, if any, for calendar 2025. Subsequent Event On July 4, 2025, H.R. 1, “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14” (“the Act”), commonly referred to as the "One Big Beautiful Bill Act,” was enacted in the United States. The Act contains several key tax provisions impacting businesses, including the permanent reinstatement of 100 percent bonus depreciation for qualified property and the restoration of immediate expensing of domestic research and experimental expenditures. The Act also modifies the business interest deduction limitation as well as several core international tax provisions. The Company is currently evaluating the impact of these tax law changes on the effective tax rate, deferred tax assets and liabilities, and cash taxes payable. Any effects will be reflected in the financial statements in the third quarter of 2025, which is the period of enactment.
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