SHW · 10-Q · 2026Q1 · Full report

Income Tax Rate Changes

SHERWIN WILLIAMS CO · 2026-04-28 · Importance 64 · Surprise 68

Deferred income taxes increased $179.4 million from March 31, 2025, primarily due to accelerated domestic research and development deductions recognized as a result of U.S. tax reform legislation referred to as the One Big Beautiful Bill Act. The Company notes its effective tax rate declined to 21.3% in Q1 2026 from 22.8% in Q1 2025, driven primarily by favorable tax benefits related to employee share-based payments. Deferred tax changes materially affected the balance sheet and were a substantive year-over-year movement. Management references Note 16 for further detail on tax matters.

Key facts

• Deferred income taxes increased $179.4 million from March 31, 2025 primarily due to accelerated domestic research and development deductions recognized as a result of U.S. tax reform legislation known as the One Big Beautiful Bill Act, partially offset by amortization of acquisition-related intangible assets.
• Effective income tax rate for the quarter ended March 31, 2026: 21.3% versus 22.8% for the quarter ended March 31, 2025.

Impact estimates