What was the effective tax rate for Petro Stopping Center in 2024?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Profit (loss) before taxation | 4,044 | 6,087 | 15,030 |
| Tax charge (credit) on profit or loss | 773 | 1,128 | 4,589 |
| Effective tax rate | 19 % | 19 % % of profit before taxation | 31 % |
| US statutory corporation tax rate | 21 | 21 | 21 |
| Increase (decrease) resulting from | |||
| Taxes on foreign operations at other than 21% | — | (7) | 9 |
| State income taxes, net of Federal income tax offset | 1 | 3 | 1 |
| Items not deductible for tax purposes | 1 | 2 | 1 |
| Adjustments in respect of prior years | 2 | (2) | — |
| Share based compensation | — | (1) | — |
| Non-controlling interest | (1) | — | — |
| Valuation allowance | (6) | 3 | (1) |
| Other | 1 | — | — |
| Effective tax rate | 19 | 19 | 31 |
Source: Item 23 — RECEIPTS **RECEIPTS (FDD pages 87–131)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, the effective tax rate for the company in 2024 was 19%. This is based on a profit before taxation of $4,044 million and a tax charge on profit or loss of $773 million. The effective tax rate is calculated by dividing the tax charge by the profit before taxation.
The FDD also provides a reconciliation of the U.S. statutory corporate income tax rate to the effective tax rate. In 2024, the U.S. statutory corporation tax rate was 21%. The difference between the statutory rate and the effective rate is due to several factors, including taxes on foreign operations, state income taxes, items not deductible for tax purposes, adjustments in respect of prior years, share-based compensation, non-controlling interest, valuation allowance, and other items.
For a prospective franchisee, understanding the effective tax rate can be useful in assessing the overall profitability and financial health of Petro Stopping Center. It provides insight into how the company's tax obligations impact its net income. While the parent company, BP America, pays income tax obligations, this information still offers a view of the tax implications on the business's earnings.
It's important to note that these figures are specific to Petro Stopping Center's overall financial performance and may not directly translate to the financial performance of an individual franchise location. However, it can serve as a benchmark for understanding the tax environment in which the company operates.