What state taxes does Basecamp Fitness make a provision for?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company is treated as a single member limited liability company (LLC) that is treated as a disregarded entity for tax purposes. As such, the Company's income, losses, and credits are included in the income tax returns of Purpose Brands Holdings LLC.
Therefore, no provision or liability for federal or state income taxes has been included in these financial statements. A provision has been made, however, for state minimum fees and other state taxes which are applicable to all entities.
Accrued expenses and other current liabilities as of December 31, 2024 and 2023 consist of sales tax payables, customer deposits, and accruals for general operating and payroll related expenses.
Source: Item 23 — RECEIPTS (FDD pages 62–248)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, the company, treated as a single-member LLC, factors its income, losses, and credits into the income tax returns of Purpose Brands Holdings LLC. Because of this structure, the company does not include a provision or liability for federal or state income taxes in its financial statements. However, Basecamp Fitness does make a provision for state minimum fees and other state taxes applicable to all entities.
This means that while Basecamp Fitness franchisees will not see a specific line item for state income taxes in the company's financial statements, they should be aware that the company does account for state minimum fees and other state-level taxes that apply to all businesses. Franchisees should consult with a tax professional to understand their specific state tax obligations and how they integrate with the overall Purpose Brands Holdings LLC structure.
Furthermore, the document indicates that accrued expenses and other current liabilities include sales tax payables. This implies that Basecamp Fitness collects and remits sales taxes, which franchisees must also manage in their individual locations. Understanding these tax obligations is crucial for franchisees to ensure compliance and accurate financial reporting.