What form does B Bops file in the U.S. federal jurisdiction?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
We have audited the accompanying financial statements of B-Bop's Franchising Corp., (an Iowa Corporation), which comprise the Balance Sheet as of December 31, 2024 and the related Statement of Income, statement of Stockholder's Equity, and Statement of Cash Flows for the year then ended, and the related notes to the financial statements.
In response to House File 352 the Company has elected to pay a newly imposed Iowa Pass-Through Entity Tax ("PTET") on behalf of the shareholder. This tax is assessed as 6.04% of the Company's Iowa-source S Corporation distributive items and is applied to reduce the shareholder's proportionate share of federal taxable income reportable on their personal income tax return. Accordingly, the shareholder recognizes a federal income tax benefit as if the shareholder's state income tax was fully deductible on the shareholder's personal federal income tax return.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 52–53)
What This Means (2025 FDD)
According to the 2025 B Bops FDD, B-Bop's Franchising Corporation is an Iowa Corporation. The independent auditor's report references that the auditor has audited the accompanying financial statements of B-Bop's Franchising Corp., (an Iowa Corporation). This indicates that B Bops is incorporated in Iowa.
Additionally, the FDD mentions that in response to House File 352, the company has elected to pay a newly imposed Iowa Pass-Through Entity Tax (PTET) on behalf of the shareholder. This tax is assessed as 6.04% of the Company's Iowa-source S Corporation distributive items and is applied to reduce the shareholder's proportionate share of federal taxable income reportable on their personal income tax return.
This suggests that B Bops operates as an S Corporation for federal income tax purposes, as the PTET is designed to allow shareholders of S corporations to deduct state income taxes on their federal returns. This election allows the shareholder to recognize a federal income tax benefit as if the shareholder's state income tax was fully deductible on the shareholder's personal federal income tax return.