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INCOME TAXES
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES
Note 6 — INCOME TAXES
During the three and six months ended June 30, 2025, the Company's effective tax rates of 24.5% and 24.2%, respectively, were above the U.S. federal statutory rate of 21.0% primarily due to the international tax rate differential and withholding tax on foreign earnings. These unfavorable items were partially offset by the favorable impact of foreign permanent items.
During the three and six months ended June 30, 2024, the Company's effective tax rates of 24.9% and 25.1%, respectively, were above the U.S. federal statutory rate of 21.0% primarily due to withholding tax on foreign earnings, tax on global intangible low-taxed income (GILTI), and non-deductible costs. These unfavorable items were partially offset by U.S. research and development credits, a decrease in valuation allowances, and favorable impacts of other foreign tax items.
In December 2024, Avient received a Notice of Deficiency (Notice) from the U.S. Internal Revenue Service (IRS) proposing an adjustment to the 2019 tax year resulting from a disallowed capital loss. The proposed incremental tax associated with the Notice is $23.8 million plus estimated interest of $6.5 million. We contested the Notice by filing a petition in U.S. Tax Court on March 4, 2025. The IRS' answer to Avient's petition included an additional accuracy-related penalty of $4.8 million and is subject to interest. The Company believes that the proposed penalty is also without merit, and we intend to contest the penalty vigorously in U.S. Tax Court. However, there can be no assurance this dispute with the IRS will be resolved favorably. As of June 30, 2025, the Company has not recorded any income tax provision related to this matter, therefore an unfavorable ruling or settlement in U.S. Tax Court would adversely impact our effective tax rate and result in a cash tax payment.
The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025. The OBBBA includes significant tax law changes, such as changes to the limitation on the business interest expense deductions, effective in 2025, and updates to the rules for GILTI and foreign-derived intangible income, effective in 2026. The Company is currently evaluating the OBBBA's impact, however, does not expect it to have a material impact to the current year consolidated financial statements.