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INCOME TAXES
 9 Months Ended
Sep. 27, 2025
INCOME TAXES  
INCOME TAXES

H.       INCOME TAXES

Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for foreign, state and local income taxes and permanent tax differences. Our effective tax rate was 23.8% in the third quarter of 2025 compared to 24.2% in the same period of 2024 and was 22.9% in the first nine months of 2025 compared to 22.3% for the same period in 2024. The decrease in our effective tax rate for the third quarter was primarily due to an increase in our tax deduction from stock-based compensation accounted for as a permanent difference. The increase in our effective tax rate for the first nine months of 2025 was primarily due to an increase in foreign subsidiary income taxed in the US and a decrease in our tax deduction from stock-based compensation for the year. A significant amount of stock-based compensation vested in the first quarter of 2024, which decreased the prior year effective tax rate in comparison to 2025.

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On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, 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. We are continuing to evaluate the impact of OBBBA beyond 2025; however, any effects are expected to relate primarily to deferred tax items and are not anticipated to materially impact our effective tax rate.

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