EMR · 10-Q · 2026Q2 · Full report
Income Tax Rate Changes
EMERSON ELECTRIC CO · 2026-08-04 · Importance 69 · Surprise 50 · Matches filing data
Nine-month income taxes were $542 million versus $536 million, while the effective tax rate declined to 22% from 25%. The One Big Beautiful Bill Act increased the current-year effective tax rate by approximately 1 percentage point through a lower foreign-derived intangible income deduction after domestic research and development changed in fiscal 2026. Favorable tax items reduced the current-year rate by approximately 2 percentage points excluding OBBBA effects. The prior-year rate included $49 million, or $0.09 per share, of discrete tax items related to the AspenTech transaction and nondeductible AspenTech fees.
Key facts
- Nine months income taxes: $542 in 2026 and $536 in 2025, effective tax rates 22 percent and 25 percent respectively; excluding OBBBA, lower rate reflected favorable tax items reducing rate by ~2 percentage points. source
- OBBBA increased the effective tax rate by approximately 1 percentage point in fiscal 2026 due to lower FDII deduction from change to domestic R&D. source
- Q3 FY2026 income taxes: $198, resulting in effective tax rate of 22 percent (prior year $154 and 21 percent). source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| net_income | negative | realized | -0.1% | Nine months income taxes: $542 in 2026 and $536 in 2025, effective tax rates 22 percent and 25 percent respectively; excluding OBBBA,… |