GNRC · 10-Q · 2026Q2 · Full report

Income Tax Rate Changes

GENERAC HOLDINGS INC. · 2026-08-04 · Importance 65 · Surprise 82 · In source text

The first-half effective income tax rate increased to 24.6% from 20.0%, raising tax provision to $70.3 million from $29.7 million. Second-quarter tax provision increased to $46.7 million from $15.4 million, while the quarterly effective rate rose to 24.6% from 17.2%. The higher rate primarily reflected a non-recurring favorable discrete tax item from a prior-year business disposition that did not recur in 2026. The OBBBA tax changes had no material effect on the six-month effective rate, and OECD Pillar Two guidance had no quarterly financial impact or expected material annual rate impact.

Key facts

• Provision for income taxes for the six months ended June 30, 2026: $70,343 thousand, or an effective tax rate of 24.6%, compared to $29,658 thousand, or 20.0% in prior-year period. source
• Provision for income taxes for the three months ended June 30, 2026: $46,696 thousand, representing an effective tax rate of 24.6%, versus $15,422 thousand (17.2%) in the prior year quarter. source
• OECD guidance in January 2026 effectively deems the U.S. tax system compliant with Pillar Two, expected to eliminate additional top-up taxes across Generac's global operations, though Qualified Domestic Minimum Top-Up Taxes in foreign jurisdictions may still apply; no impact to quarter results. source
• Generac expects cash tax savings from 100% bonus depreciation and immediate expensing of domestic R&D costs enacted in OBBBA but states these changes did not have a material impact on effective tax rate for six months ended June 30, 2026. source
• Provision for income taxes for the three months ended June 30, 2026 was $46,696 thousand and for the three months ended June 30, 2025 was $15,422 thousand; for the six months ended June 30, 2026 provision for income taxes was $70,343 thousand and for 2025 was $29,658 thousand. source

Impact estimates