DOVER CorpDOV
DOVER Corp Income Taxes Disclosure
14. Income Taxes
Income taxes have been based on the following components of earnings before provision for income taxes and discontinued operations in the consolidated statements of earnings:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | 844,403 | $ | 1,127,389 | $ | 608,423 | |||||||||||
| Foreign | 529,849 | 629,627 | 514,577 | ||||||||||||||
| Total | $ | 1,374,252 | $ | 1,757,016 | $ | 1,123,000 | |||||||||||
Income tax expense (benefit) related to continuing operations for the years ended December 31, 2025, 2024 and 2023 is comprised of the following:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| U.S. federal | $ | 131,881 | $ | 233,348 | $ | 114,195 | |||||||||||
| State and local | 18,529 | 47,199 | 13,930 | ||||||||||||||
| Foreign | 155,029 | 168,151 | 143,216 | ||||||||||||||
| Total current | 305,439 | 448,698 | 271,341 | ||||||||||||||
| Deferred: | |||||||||||||||||
| U.S. federal | (8,707) | (35,304) | (28,471) | ||||||||||||||
| State and local | 1,472 | (12,362) | 4,047 | ||||||||||||||
| Foreign | (21,381) | (43,984) | (67,781) | ||||||||||||||
| Total deferred | (28,616) | (91,650) | (92,205) | ||||||||||||||
Provision for income taxes | $ | 276,823 | $ | 357,048 | $ | 179,136 | |||||||||||
Effective January 1, 2025, the Company adopted ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures prospectively. The following table is a reconciliation of the U.S. federal statutory rate of 21% to the Company’s effective rate for the year ended December 31, 2025 in accordance with the guidance in ASU No. 2023-09:
Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
Amount | Percent | ||||||||||
| U.S. federal income tax rate | $ | 288,578 | 21.0 | % | |||||||
State and local taxes, net of federal income tax benefit(a) | 15,611 | 1.1 | |||||||||
| Foreign tax effects | |||||||||||
| Switzerland: | |||||||||||
| Statutory tax rate differential | (15,059) | (1.1) | |||||||||
| Other | 10,135 | 0.7 | |||||||||
| Other jurisdictions | 25,229 | 1.8 | |||||||||
| Enactment of new tax laws | 4,414 | 0.3 | |||||||||
| Effect of cross-border tax laws | |||||||||||
| Foreign-derived intangible income | (15,814) | (1.2) | |||||||||
| Other | 1,467 | 0.1 | |||||||||
| Tax credits | (7,308) | (0.5) | |||||||||
| Change in valuation allowance | — | — | |||||||||
Non-taxable or non-deductible items | (26) | — | |||||||||
| Changes in unrecognized tax benefits | 4,473 | 0.3 | |||||||||
| Other adjustments | |||||||||||
| Capital loss | (34,853) | (2.5) | |||||||||
| Other | (24) | — | |||||||||
| Total tax provision and effective tax rate | $ | 276,823 | 20.1 | % | |||||||
(a) State taxes in California, Illinois, Michigan, Minnesota, New Hampshire, and Pennsylvania comprised greater than 50% of the tax effect in this category.
The following table is a reconciliation of the U.S. federal statutory rate of 21% to the Company’s effective rate for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU No. 2023-09:
Years Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| U.S. federal income tax rate | 21.0 | % | 21.0 | % | |||||||
| State and local taxes, net of federal income tax benefit | 1.0 | 1.5 | |||||||||
| Foreign operations tax effect | 0.6 | 0.5 | |||||||||
| Foreign-derived intangible income | (1.0) | (1.5) | |||||||||
| Share awards | (0.3) | (0.4) | |||||||||
Withholding tax | 0.1 | 2.7 | |||||||||
| Change in valuation allowance | (0.4) | (6.2) | |||||||||
| Dispositions | 0.6 | — | |||||||||
| Tax credits | (0.4) | (0.6) | |||||||||
| Audit resolutions | (0.2) | (0.7) | |||||||||
Other | (0.7) | (0.3) | |||||||||
| Effective tax rate | 20.3 | % | 16.0 | % | |||||||
The tax effects of temporary differences that give rise to deferred tax assets and liabilities are as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Deferred Tax Assets: | |||||||||||
| Accrued compensation, postretirement and other employee benefits | $ | 38,722 | $ | 45,145 | |||||||
| Accrued expenses | 18,689 | 17,218 | |||||||||
| Net operating loss and other carryforwards | 386,863 | 311,043 | |||||||||
| Inventories | 31,632 | 31,583 | |||||||||
| Allowance for credit losses | 7,938 | 8,428 | |||||||||
| Accrued insurance | 1,569 | 2,340 | |||||||||
| Long-term liabilities, warranty and environmental costs | 6,585 | 6,818 | |||||||||
| Lease obligations | 54,357 | 51,837 | |||||||||
| Capitalized research and development | 39,167 | 68,240 | |||||||||
| Other assets | 17,821 | — | |||||||||
| Total gross deferred tax assets | 603,343 | 542,652 | |||||||||
| Valuation allowance | (209,948) | (198,082) | |||||||||
| Total deferred tax assets, net of valuation allowances | $ | 393,395 | $ | 344,570 | |||||||
| Deferred Tax Liabilities: | |||||||||||
| Intangible assets | $ | (523,317) | $ | (440,946) | |||||||
| Property, plant and equipment | (73,924) | (69,920) | |||||||||
| Lease right-of-use assets | (50,356) | (48,088) | |||||||||
| Other liabilities | (10,057) | (21,250) | |||||||||
Total deferred tax liabilities | (657,654) | (580,204) | |||||||||
| Net deferred tax liability | $ | (264,259) | $ | (235,634) | |||||||
| Classified as follows in the Consolidated Balance Sheets: | |||||||||||
| Other assets and deferred charges | $ | 130,109 | $ | 116,372 | |||||||
| Deferred income taxes | (394,368) | (352,006) | |||||||||
| $ | (264,259) | $ | (235,634) | ||||||||
As of December 31, 2025, the Company has $304,941 of deferred tax assets recorded related to non-U.S. tax loss carryforwards primarily resulting from non-operating activities and tax credit carryforwards. The non-U.S. losses and credits as of December 31, 2025 are available to be carried forward, with $122,742 expiring during the years 2026 through 2045, and the remaining $182,199 carried forward indefinitely.
As of December 31, 2025, the Company has $81,922 of deferred tax assets recorded related to U.S. federal and state tax loss and tax credit carryforwards. The U.S. federal and state tax losses and credits as of December 31, 2025 are available to be carried forward, with $78,970 expiring during the years 2026 through 2045, and the remaining $2,952 carried forward indefinitely.
The Company maintains valuation allowances by jurisdiction against the deferred tax assets related to certain of these carryforwards for which it is more likely than not that some portion or all will not be realized. The following table is a reconciliation of the beginning and ending balances of the Company's valuation allowance on deferred tax assets:
| Total | |||||
| Balance at January 1, 2023 | $ | 271,203 | |||
Additions | 31,388 | ||||
Reductions | (92,660) | ||||
| Balance at December 31, 2023 | 209,931 | ||||
| Additions | 27,192 | ||||
| Reductions | (39,041) | ||||
| Balance at December 31, 2024 | 198,082 | ||||
| Additions | 25,027 | ||||
| Reductions | (13,161) | ||||
| Balance at December 31, 2025 | $ | 209,948 | |||
Unrecognized Tax Benefits
The Company files U.S federal, state, local and non-U.S. tax returns. The Company is routinely audited by the tax authorities in these jurisdictions, and a number of audits are currently underway. It is reasonably possible during the next twelve months that uncertain tax positions may be settled, which could result in a decrease in the gross amount of unrecognized tax benefits. This decrease may result in an income tax benefit. All significant U.S. federal, state, local and non-U.S. matters have been concluded through 2022. The Company believes adequate provision has been made for all income tax uncertainties.
The following table is a reconciliation of the beginning and ending balances of the Company's unrecognized tax benefits:
| Total | |||||
| Unrecognized tax benefits at January 1, 2023 | $ | 28,186 | |||
| Additions based on tax positions related to the current year | 1,235 | ||||
| Additions for tax positions of prior years | 2,223 | ||||
| Reductions for tax positions of prior years | (3,361) | ||||
| Cash settlements | (1,791) | ||||
| Lapse of statutes | (3,983) | ||||
Unrecognized tax benefits at December 31, 2023 | 22,509 | ||||
| Additions based on tax positions related to the current year | 33,688 | ||||
| Additions for tax positions of prior years | 507 | ||||
| Reductions for tax positions of prior years | (337) | ||||
| Cash settlements | (2,307) | ||||
| Lapse of statutes | (4,314) | ||||
Unrecognized tax benefits at December 31, 2024 | 49,746 | ||||
| Additions based on tax positions related to the current year | 3,783 | ||||
| Additions for tax positions of prior years | 2,533 | ||||
| Reductions for tax positions of prior years | (1,122) | ||||
| Cash settlements | (856) | ||||
| Lapse of statutes | (3,344) | ||||
Unrecognized tax benefits at December 31, 2025 | $ | 50,740 | |||
If recognized, the net amount of potential tax benefits as of December 31, 2025 that would impact the Company's effective tax rate is $44,077. During the years ended December 31, 2025, 2024 and 2023, the Company recorded (expense)/income of $(2,506), $617 and $1,378, respectively, as a component of provision for income taxes for the accrued interest and penalties related to unrecognized tax benefits. The Company had accrued interest and penalties of $6,687 at December 31, 2025 and $4,181 at December 31, 2024, which are not included in the unrecognized tax benefits table above.
Income Tax Payments
Disclosed below is a summary of income taxes paid by jurisdiction pursuant to the disclosure requirements of ASU No. 2023-09 for the year ended December 31, 2025:
Year Ended December 31, 2025 | |||||
| United States – federal | $ | 131,106 | |||
| United States - state and local | 38,292 | ||||
| China | 23,322 | ||||
| Other | 114,348 | ||||
| Total | $ | 307,068 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 9, 2024 | |
| 2022 | Feb 10, 2023 | |
| 2021 | Feb 11, 2022 | |
| 2020 | Feb 12, 2021 | |
| 2019 | Feb 14, 2020 | |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 9, 2018 | |
| 2016 | Feb 10, 2017 | |
| 2015 | Feb 12, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.