EMR · 10-K · 2026A · Full report

Income Tax Rate Changes

EMERSON ELECTRIC CO · 2026-11-09 · Importance 50 · Surprise 58

Emerson’s effective tax rate was 23% in fiscal 2026, compared with 24% in 2025 and 21% in 2024; income taxes were $796 million, $690 million, and $420 million, respectively. The OBBBA increased the 2026 effective rate by approximately 1 percentage point because of a lower foreign-derived intangible income deduction following the change to domestic research and development. Favorable tax items reduced the 2026 rate by approximately 2 percentage points, while $36 million of prior-year discrete tax items and nondeductible AspenTech fees increased the 2025 rate by approximately 2 points.

Key facts

• The OBBBA increased Emerson's fiscal 2026 effective tax rate by approximately 1 percentage point; Emerson expects the OBBBA to slightly benefit its effective tax rate beginning in fiscal 2027. source
• Emerson's effective tax rate was 23% in 2026, 24% in 2025, and 21% in 2024. source
• Excluding the OBBBA impact, favorable tax items reduced Emerson's fiscal 2026 effective tax rate by approximately 2 percentage points. source
• Emerson's adoption of ASU No. 2023-09 in the fourth quarter of 2026 expanded income tax disclosures and had no impact on results of operations. source