J · 10-Q · 2026Q2 · Full report

Income Tax Rate Changes

JACOBS SOLUTIONS INC. · 2026-08-04 · Importance 59 · Surprise 82 · In source text

The continuing-operations effective tax rate rose to 43.4% in the third quarter of fiscal 2026 from 21.9% a year earlier, increasing quarterly tax expense by $50.9 million to $104.6 million. The quarter included $35.8 million of non-deductible PA Consulting Transaction expenses, $9.9 million of U.S. state taxes and $6.3 million of U.S. tax on foreign earnings. The nine-month effective tax rate was 41.9% versus 45.6% in the prior year, with $47.0 million of unfavorable tax effects from non-deductible PA Consulting Transaction expenses. Management expects the PA Consulting-related non-deductible expenses to continue affecting the effective tax rate for the rest of fiscal 2026.

Key facts

• The Company's effective tax rate from continuing operations for the three months ended June 26, 2026 was 43.4% compared to 21.9% for the three months ended June 27, 2025 source
• Significant items for the three months ended June 26, 2026 included $35.8 million of non-deductible expenses associated with the PA Consulting Transaction, $9.9 million of U.S. state income taxes and $6.3 million of U.S. tax on foreign earnings source
• Significant items for the nine months ended June 26, 2026 included $47.0 million of non-deductible expenses associated with the PA Consulting Transaction, $12.7 million of U.S. state income taxes and $9.0 million of U.S. tax on foreign earnings source
• The Company's effective tax rate from continuing operations for the nine months ended June 26, 2026 was 41.9% compared to 45.6% for the nine months ended June 27, 2025 source

Impact estimates