Are all of Remax's earnings subject to U.S. income taxes?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
As a "flow through" entity for tax purposes, the Company's member is responsible for the substantial majority of taxes on the Company's earnings, accordingly, no provision for U.S. income taxes on those earnings has been made. The Company has certain subsidiaries and foreign income that are taxable, which represent the entirety of the Company's tax provision. For the income subject to tax, the difference to U.S. statutory rates would be attributable to the difference between U.S. and foreign tax rates. Income taxes incurred on those earnings are recorded in the "Provision for income taxes" in the accompanying Consolidated Statements of Income (Loss) and consist of the following (in thousands):
Source: Item 1 — Business and Organization (FDD pages 334–464)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, as a "flow through" entity, the company's member is responsible for the majority of taxes on the company's earnings. Therefore, no provision for U.S. income taxes on those earnings has been made. However, Remax does have certain subsidiaries and foreign income that are taxable, which represents the entirety of the company's tax provision.
For the income subject to tax, the difference to U.S. statutory rates would be attributable to the difference between U.S. and foreign tax rates. Income taxes incurred on those earnings are recorded in the "Provision for income taxes" in the accompanying Consolidated Statements of Income (Loss).
This means that a portion of Remax's income is subject to U.S. income taxes, while the majority of taxes on the company's earnings are the responsibility of the company's member. A prospective franchisee should consult with a financial advisor to understand the tax implications of investing in a Remax franchise.