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 nine months ended October 3, 2026 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 and the deduction for foreign-derived deduction-eligible income.

The effective tax rates for the three and nine months ended September 27, 2025 of 22% 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 October 3, 2026 of 24% was higher than the effective tax rate for the three months ended September 27, 2025 of 22%, primarily due to lower excess tax benefits of share-based compensation, partially offset by an increased deduction for foreign-derived deduction-eligible income. The effective tax rate for the nine months ended October 3, 2026 of 23% was equal to the effective tax rate for the nine months ended September 27, 2025, primarily due to an increased deduction for foreign-derived deduction-eligible income, offset by lower excess tax benefits of share-based compensation.

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 nine months ended October 3, 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.