LLY · 10-Q · 2026Q3 · Full report

Income Tax Rate Changes

ELI LILLY & Co · 2026-10-29 · Importance 56 · Surprise 46

The effective tax rate was 23.3% in the third quarter of 2026, compared with 22.8% in the third quarter of 2025, and 21.0% for the first nine months of 2026, compared with 19.8% in 2025. Income tax expense rose to $1.955 billion for the quarter from $1.650 billion, and to $5.561 billion for the nine months from $3.463 billion. Higher rates were primarily driven by the unfavorable tax impact of nondeductible acquired IPR&D charges, with a larger impact in 2026; 2025 rates were also adversely affected by U.S. tax law changes.

Key facts

• The effective tax rates were 23.3% and 21.0% for the three and nine months ended September 30, 2026, compared with 22.8% and 19.8% in the corresponding 2025 periods. source
• The increase in Lilly's effective tax rates was primarily driven by the unfavorable tax impact of nondeductible acquired IPR&D charges, with a larger impact in 2026; 2025 rates were also unfavorably affected by U.S. tax law changes. source