INCOME TAXES |
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Jun. 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| INCOME TAXES | NOTE 5—INCOME TAXES
Provision for income taxes for the three and six months ended June 30, 2025 totaled $2.5 million and $9.1 million, respectively, resulting in an effective tax rate of (2.4)% and (5.2)%, respectively. Provision for income taxes for the three and six months ended June 30, 2024 totaled $20.3 million and $25.7 million, respectively, resulting in an effective tax rate of (42.7)% and (21.9)%, respectively. The main drivers of the increase in the effective income tax rate for the three and six months ended June 30, 2025 compared to the prior year was the geographical mix of earnings, the establishment of a valuation allowance in the amount of $13.7 million for the Company’s China Subsidiary recorded in the second quarter 2024 and an increase in its reserve in the amount of $3.5 million for unrecognized tax benefits related to its ongoing tax examination in China recorded in the second quarter 2024. On July 4, 2025, the United States enacted H.R. 1, commonly referred to as the One Big Beautiful Bill Act (OBBBA), resulting in changes to U.S. federal income tax law, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. Trinseo is currently evaluating the impact of the legislation on its results of operations and will recognize the related tax impacts in the period of enactment. The Organization of Economic Co-operation and Development’s (“OECD”) Global Anti-Base Erosion (“GloBE”) rules under Pillar Two have been enacted by the European Union and other countries in which the Company operates. There was not a material impact to tax expense for the three and six months ended June 30, 2025 and 2024. The Company will continue to monitor the implementation of Pillar Two by jurisdiction and evaluate the potential impact on the consolidated financial statements. |
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