As of December 31, 2024, did Zoomin Groomin identify any uncertain tax positions?
Zoomin_Groomin Franchise · 2025 FDDAnswer from 2025 FDD Document
Income Taxes
The entity is structured as a limited liability company under the laws of the State of Virginia. The Company has elected to be treated as a corporation for federal and state income tax purposes. The Company follows the guidance under Accounting Standards Codification Topic 740, Accounting for Uncertainty in Income Taxes, which prescribes a more-likely-than-not measurement methodology to reflect the financial statement impact of uncertain tax positions taken or expected to be taken in the tax return. If taxing authorities were to disallow any tax positions taken by the Company, the additional income taxes, if any, would be imposed on the Company. The Company has not identified any uncertain tax positions for the three years ending December 31, 2024. The Company has a net operating loss carryforward that may be used to offset future income tax expense. At December 31, 2024, Management estimated the benefit of the operating loss and recorded an income tax asset on the balance sheet based on the current federal and state corporate tax rates of twenty-one percent and five percent, respectively. The Company's income tax returns are subject to examination by taxing authorities for a period of three years from the date they are filed.
Source: Item 9 — 01. Financial Statements and Exhibits. (FDD pages 68–156)
What This Means (2025 FDD)
According to Zoomin Groomin's 2025 Franchise Disclosure Document, the company did not identify any uncertain tax positions for the three years ending December 31, 2024. This is based on their adherence to Accounting Standards Codification Topic 740, which guides the accounting for uncertainty in income taxes. This standard requires a "more-likely-than-not measurement methodology" to assess the impact of tax positions on financial statements. If taxing authorities were to challenge any of Zoomin Groomin's tax positions, the company would be responsible for any additional income taxes.
Zoomin Groomin, structured as a limited liability company in Virginia, has elected to be treated as a corporation for federal and state income tax purposes. The company also has a net operating loss carryforward, which can be used to offset future income tax expenses. As of December 31, 2024, the management estimated the benefit of this operating loss and recorded an income tax asset on the balance sheet, based on the current federal and state corporate tax rates of 21% and 5%, respectively.
Prospective franchisees should note that Zoomin Groomin's income tax returns are subject to examination by taxing authorities for three years from the filing date. While no uncertain tax positions have been identified, this does not guarantee that the taxing authorities will agree with all tax positions taken by the company. This information is crucial for potential franchisees to understand the financial stability and tax compliance of Zoomin Groomin.