EXPD · 10-Q · 2026Q3 · Full report

Income Tax Rate Changes

EXPEDITORS INTERNATIONAL OF WASHINGTON INC · 2026-11-04 · Importance 46 · Surprise 56

The consolidated effective income tax rate was 23.1% for the third quarter of 2026, down from 25.2% in the third quarter of 2025, and 24.4% for the first nine months, down from 26.6%. Income tax expense nevertheless increased to $103.8 million in the quarter from $75.1 million and to $271.4 million for nine months from $220.9 million, as earnings before taxes increased. The lower rates primarily reflected a greater U.S. tax benefit from licensing income earned from foreign markets, higher U.S. research and development credits, and lower state taxes. The 2026 rates remained above the 21% U.S. federal statutory rate, principally due to taxes on international operations, cross-border withholding taxes, and higher foreign and state tax rates.

Key facts

• Expeditors’ consolidated effective income tax rates were 23.1% and 24.4% for the three and nine months ended September 30, 2026, compared with 25.2% and 26.6% in the same periods of 2025. source
• Expeditors’ lower tax rates primarily reflected a greater U.S. tax benefit related to licensing income from foreign markets, higher U.S. research and development tax credits, and lower state taxes. source