What was the effective tax rate for Corcoran in 2022?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Federal statutory rate | 21 % | 21 % | 21 % |
| State and local income taxes, net of federal tax benefits | 5 | 1 | 3 |
| Non-deductible equity compensation | (1) | (1) | — |
| Non-deductible executive compensation | (4) | (4) | (1) |
| Goodwill impairment | — | (5) | (8) |
| Uncertain tax positions | — | — | (1) |
| Tax credits (a) | 5 | 6 | 7 |
| Net change in valuation allowance (b) | (21) | (5) | — |
| Other permanent differences | (3) | — | (2) |
| Effective tax rate | 2 % | 13 % | 19 % |
Source: Item 23 — RECEIPTS (FDD pages 75–276)
What This Means (2025 FDD)
According to Corcoran's 2025 Franchise Disclosure Document, the effective tax rate in 2022 was 19%. The table provided in Item 23 reconciles the company's effective income tax rate to the U.S. federal statutory rate of 21%.
Several factors contributed to the difference between the statutory rate and the effective tax rate. These include state and local income taxes (net of federal tax benefits), which added 3% to the rate. Non-deductible executive compensation reduced the rate by 1%, while goodwill impairment reduced it by 8%. Uncertain tax positions also reduced the rate by 1%. Tax credits decreased the rate by 7%, and other permanent differences further decreased it by 2%.
Prospective franchisees should understand that the effective tax rate can vary significantly from year to year due to these factors. While the federal statutory rate remains constant, items like state and local taxes, executive compensation, and tax credits can fluctuate, impacting the overall tax burden for Corcoran. Reviewing these factors and their impact on the effective tax rate can provide insights into the financial performance and tax strategies of the company.