Besides federal income tax, what other taxes is Batteries Plus Bulbs subject to?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
No provision for federal income taxes is recorded in the consolidated financial statements since the Company is treated as a disregarded entity for federal income tax purposes. Accordingly, the Company's taxable income is reported on the income tax return of Holdings and the two companies are not subject to
a tax sharing agreement. In addition, the Company is subject to various income taxes and surcharges in states with franchised stores, and in China and Hong Kong with respect to its wholly owned subsidiaries, whose tax expense and attributes are not material.
Batteries Plus and Ascent collect sales tax from certain customers and remits the entire amount to the appropriate governmental entities. Batteries Plus and Ascent's accounting policy is to exclude the tax collected and remitted from merchandise sales and cost of merchandise sold.
Source: Item 21 — Financial Statements (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Batteries Plus Bulbs FDD, while the company itself is not subject to federal income taxes, it is subject to various other taxes. Because Batteries Plus Bulbs is treated as a disregarded entity for federal income tax purposes, its taxable income is reported on the income tax return of its parent company, Holdings.
Batteries Plus Bulbs is subject to various income taxes and surcharges in states with franchised stores. Additionally, the company's wholly-owned subsidiaries in China and Hong Kong are subject to income taxes there, although these are considered immaterial.
Batteries Plus Bulbs also collects sales tax from certain customers and remits the entire amount to the appropriate governmental entities. The company's accounting policy is to exclude the tax collected and remitted from merchandise sales and cost of merchandise sold.