What was the total provision for income taxes for Benihana in 2021 (in thousands)?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
s (in thousands):
| | | For the years ended December 31, | | | | | |----------|--------------------|----------------------------------|--|--|--|--| | | 2021 | 2020 | | | | | | Domestic | $ 33,331 $ | (19,129) | | | | | | Foreign | 203 | 106 | | | | | | Total | $ 33,534 $ | (19,023) | | | | | The components of the Company's provision (benefit) for income taxes were as follows (in thousands):
| For the years ended December 31, | ||||
|---|---|---|---|---|
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the total provision for income taxes in 2021 was $1,586,000. This figure is broken down into several components, including current and deferred taxes. Current taxes include federal (which was $0), state and local ($564,000), and foreign ($110,000) taxes, totaling $674,000. Deferred taxes include federal ($195,000) state and local ($1,107,000) and foreign ($0) taxes, totaling $912,000.
In 2020, Benihana had a benefit for income taxes of $5,400,000, contrasting with the provision in 2021. The effective tax rate for Benihana was 4.7% in 2021. This rate differs from the U.S. statutory tax rate of 21% due to factors such as tax credits for FICA taxes on employee tips, taxes in foreign and local jurisdictions, the exclusion of Paycheck Protection Program loans forgiven under the CARES Act, and windfall tax benefits from equity compensation.
For a prospective franchisee, understanding these tax provisions and their components is crucial for financial planning. The fluctuation in tax rates and provisions from year to year highlights the impact of various tax benefits, credits, and liabilities on Benihana's overall financial performance. Franchisees should consult with financial advisors to understand how these factors could affect their own tax obligations and profitability.