For Budget, what was the effective tax rate in 2023?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| U.S. federal statutory rate Adjustments to reconcile to our effective rate: State and local income taxes, net of federal tax benefits Changes in valuation allowances Taxes on foreign operations at rates different than U.S. federal statutory rates | 2024 21.0 % 6.0 0.2 (0.9) 3.6 | 21.0 % 4.0 | 21.0 % 3.9 (1.3) 1.2 (0.4) |
| Tax credits (a) Stock-based compensation Other non-deductible (non-taxable) items Other (a) | 0.1 | (1.1) | (0.5) |
| (0.2) | 0.7 | 0.4 | |
| 1.0 | (1.1) | (0.1) | |
| 30.8 % | 14.6 % | 24.2 % |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the effective tax rate for the year 2023 was 14.6%. This rate is a result of adjustments made to the U.S. federal statutory rate of 21.0%.
The adjustments include factors such as state and local income taxes (net of federal tax benefits) which added 4.0%, changes in valuation allowances which reduced the rate by 1.1%, and taxes on foreign operations which increased the rate by 0.7%. Other adjustments, including tax credits and stock-based compensation, also contributed to the difference between the statutory rate and the effective tax rate.
For a prospective Budget franchisee, understanding the effective tax rate is crucial as it reflects the actual tax burden on the company's income. This information, found in the financial statements, provides insight into how various tax adjustments and incentives impact Budget's overall profitability. While this is the effective tax rate for Budget, franchisees should consult with a professional tax advisor to understand their own tax obligations and potential deductions.