Tax payables refer to the amount of money a company owes to tax authorities, including income taxes, sales taxes, and property taxes. It is considered a current liability and is recorded on the company's balance sheet.
Digging deeper into the concept, tax payables not only include federal and state income taxes but also other taxes a company is obligated to pay. These other taxes could include property taxes, sales taxes, and payroll taxes. The amount a company owes in taxes is calculated based on its taxable income, which might differ from its net income due to various tax deductions and credits.
Moreover, the amount of tax payable can be influenced by a company's tax planning strategies. For instance, a company may opt to defer some of its income to future periods to lower its current tax payable.
Tax payables are crucial to a company's cash flow management because failing to accurately estimate and pay these liabilities can result in penalties and interest charges. Therefore, monitoring tax payables is essential for assessing a company's financial health.
For Macy's, tax payable is calculated by subtracting the taxes already paid from the total tax expense. This includes sales taxes collected from customers, property taxes on their various locations, and corporate income taxes on their profits.
Facebook's tax payable includes corporate income taxes on its global profits, property taxes on its real estate holdings, and sales taxes on its advertising services. These are calculated and reported in its financial statements.
Chevron's tax payable includes corporate income tax on its profits, property taxes on its oil fields and refineries, and sales taxes on the sale of its petroleum products. The company also has to account for international tax laws as it operates in multiple countries.