Meta's effective tax rate drops to 2% after $8 billion Treasury relief, prompting Senate inquiry

Meta’s recent quarterly filing revealed an effective tax rate of just 2% for the nine months through September 30, 2026, after applying an $8.03 billion tax benefit from Treasury Notice 2026-7, which relieved the company from the corporate alternative minimum tax on capitalized R&D costs. Without the benefit, the rate would have been roughly 14%, and the company’s tax provision would have risen to about $9.06 billion. The benefit also turned Meta’s first-quarter rate negative, offsetting a prior 87% effective rate in the third quarter of 2025.

Separately, seven Democratic senators sent a letter to Mark Zuckerberg demanding clarification on Meta’s use of the federal research credit for its AI-optimized data-center pilots, which the company says cut its tax bill by $6.6 billion between 2023 and 2025. Meta argued that its AI data-centers are experimental and qualify for the credit, pointing to $200 billion in U.S. R&D investment over the past five years. The company also noted $20.82 billion in unrecognized tax benefits that could further lower future tax provisions.