In which geographic locations does Itan file income taxes?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Income taxes - The Company follows accounting standards applicable to accounting for income taxes, which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for expected future tax consequences. It generally considers all expected future events other than enactments of changes in the tax laws or rates. Under this method, deferred tax assets and liabilities are recognized based on differences between the financial statements and tax basis of assets and liabilities using presently enacted tax rates.
The Company follows accounting standards which clarify the accounting for uncertainty in income taxes recognized in the financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition and measurement of a tax position taken or to be taken in a tax return. As of December 31, 2023 and 2022, the Company has not accrued interest or penalties related to uncertain tax positions.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the company adheres to accounting standards for income taxes, utilizing an asset and liability approach to recognize deferred tax assets and liabilities for expected future tax consequences. This method considers all expected future events, excluding changes in tax laws or rates, and bases the recognition of deferred tax assets and liabilities on the differences between financial statements and the tax basis of assets and liabilities, using current tax rates.
The FDD also states that as of December 31, 2023 and 2022, Itan had not accrued any interest or penalties related to uncertain tax positions.
However, the document does not specify the exact geographic locations where Itan files income taxes. For a prospective franchisee, this information is crucial to understand the tax obligations and compliance requirements associated with operating an Itan franchise, especially if they are located outside of California where all the salons are currently located. It is recommended that prospective franchisees ask Itan's franchisor directly about the specific states and jurisdictions where the company files income taxes to fully understand their potential tax liabilities and reporting obligations.