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 rates for the three and six months ended July 4, 2026 of 25% and 22%, respectively, were higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, partially offset by excess tax benefits of share-based compensation.

The effective tax rates for the three and six months ended June 28, 2025 of 24% and 23%, respectively, were higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, partially offset by excess tax benefits of share-based compensation.

The effective tax rate for the three months ended July 4, 2026 of 25% was higher than the effective tax rate for the three months ended June 28, 2025 of 24%, primarily due to a net increase in unrecognized tax benefits. The effective tax rate for the six months ended July 4, 2026 of 22% was lower than the effective tax rate for the six months ended June 28, 2025 of 23%, primarily due to higher excess tax benefits of share-based compensation and an increased deduction for foreign-derived deduction-eligible income.

On July 4, 2025, the "One Big Beautiful Bill Act" was enacted into law, introducing a broad range of changes to the U.S. corporate income tax framework. The legislation includes business provisions that impact the Company's tax position, including tax cut extensions and modifications to the international tax framework and corporate income tax deductions. Certain provisions of this legislation were effective for the 2025 fiscal year, whereas other provisions became effective starting in 2026. For the six months ended July 4, 2026, the impact of the enacted legislation on the Company's tax position was not material. The Company will continue to assess the ongoing impact of this legislation as further guidance is made available.