EXPD · 10-Q · 2026Q2 · Full report

Income Tax Rate Changes

EXPEDITORS INTERNATIONAL OF WASHINGTON INC · 2026-08-05 · Importance 30 · Surprise 40

The consolidated effective tax rate declined to 25.4% in the second quarter of 2026 from 28.7% in the prior-year quarter. The six-month effective tax rate declined to 25.2% from 27.3%, reducing the tax rate on $664.9 million of pretax income. The lower rates primarily reflected fewer nondeductible foreign expenses and lower income from operations in jurisdictions with tax rates above U.S. rates. Second-quarter income tax expense increased 23% to $91.2 million because pretax earnings increased 39% to $358.5 million.

Key facts

• The consolidated effective income tax rate was 25.4% and 25.2% for the three and six months ended June 30, 2026, down from 28.7% and 27.3% in the same periods of 2025. source
• Decline in tax rate was driven mainly by a smaller unfavorable impact from international subsidiaries resulting from fewer nondeductible foreign expenses and lower expense from operations in countries with tax rates higher than those in the U.S. source