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Taxes on Income
 9 Months Ended
Sep. 30, 2025
Taxes on Income  
Taxes on Income

16. Taxes on Income

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The company’s effective tax rate was 19.4 percent and 21.4 percent for the three and nine months ended September 30, 2025, respectively. As compared to the statutory U.S. tax rate, the effective tax rate for the three and nine months ended September 30, 2025, increased by 1.4 and 0.5 percentage points, respectively, for U.S. permanent differences, increased by 0.8 and 0.9 percentage points, respectively, for state and local taxes, and decreased by 3.9 and 1.7 percentage points, respectively, for the sale of the Saudi Arabian business.

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The company’s effective tax rate was 18.5 percent and 22.3 percent for the three and nine months ended September 30, 2024, respectively. As compared to the statutory U.S. tax rate, the effective tax rate for the three and nine months ended September 30, 2024, increased by 0.7 and 0.8 percentage points, respectively, for Pillar Two Global Minimum Taxes, increased by 0.2 and 1.0 percentage points, respectively, for non-U.S. rate differences and withholding taxes net of credits and decreased by 2.8 and 0.5 percentage points, respectively, for state and local taxes.

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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 act does not materially impact our effective tax rate in the third quarter of 2025 and is not expected to in future periods.

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