Motorola Solutions Inc

7. Income Taxes

At the end of each interim reporting period, the Company makes an estimate of its annual effective income tax rate. Tax expense in interim periods is calculated at the estimated annual effective tax rate plus or minus the tax effects of items of income and expense that are discrete to the period. The estimate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods.

The following table provides details of income taxes:

The effective tax rate for the three months ended March 29, 2025 of 21% was equal to the U.S. federal statutory tax rate of 21% primarily due to excess tax benefits of share-based compensation, offset by state tax expense.

The effective tax rate for the three months ended March 30, 2024 of 58% was higher than the U.S. federal statutory tax rate of 21%, primarily due to the non-tax deductible loss on the extinguishment of the Silver Lake Convertible Debt and state tax expense, offset by the tax benefit recognized upon the Company's decision to implement a business initiative which allowed for additional utilization of foreign tax credit carryforwards and a higher foreign derived intangible income deduction on its 2023 U.S. tax return, and excess tax benefits of share-based compensation.

The effective tax rate for the three months ended March 29, 2025 of 21% was lower than the effective tax rate for the three months ended March 30, 2024 of 58%, primarily due to the non-tax deductible loss on the extinguishment of the Silver Lake Convertible Debt in 2024, partially offset by the tax benefit recognized upon the Company's decision to implement a business initiative in 2024 which allowed for additional utilization of foreign tax credit carryforwards and a higher foreign derived intangible income deduction on its 2023 U.S. tax return.