12. Income Taxes

Income before income taxes was as follows for Fiscal 2025, Fiscal 2024 and Fiscal 2023:


	(in thousands)
	Year Ended
	January 31, 2026		February 1, 2025		February 3, 2024
Domestic	$	794,349	$	659,414	$	454,491
Foreign		21,769		15,400		11,282
Total income before income taxes	$	816,118	$	674,814	$	465,773

Income tax expense was as follows for Fiscal 2025, Fiscal 2024 and Fiscal 2023:


	(in thousands)
	Year Ended
	January 31, 2026			February 1, 2025		February 3, 2024
Current:
Federal	$	129,660		$	105,828	$	85,834
State		40,532			31,116		16,150
Foreign		7,989			5,594		3,477
Subtotal		178,181			142,538		105,461
Deferred:
Federal		28,287			25,560		12,583
State		(612	)		2,889		7,311
Foreign		109			188		769
Subtotal		27,784			28,637		20,663
Total income tax expense	$	205,965		$	171,175	$	126,124

Income taxes paid (net of refunds received) for Fiscal 2025, Fiscal 2024 and Fiscal 2023:


	(in thousands)
	January 31,		February 1,		February 3,
	2026		2025		2024
Income Taxes Paid:
Federal	$	124,000	$	132,000	$	69,500
State		38,526		33,399		13,877
Foreign		8,360		4,860		2,860
Total income tax expense	$	170,886	$	170,259	$	86,237

The tax rate reconciliations were as follows for Fiscal 2025, Fiscal 2024 and Fiscal 2023:


	(all dollar amounts in thousands)
	Fiscal Year Ended
	January 31, 2026						February 1, 2025						February 3, 2024
	Amount			Percent			Amount			Percent			Amount			Percent
U.S. federal statutory tax rate	$	171,385			21.0	%	$	141,711			21.0	%	$	97,812			21.0	%
State income taxes, net of federal benefit (a)		33,271			4.1			28,202			4.2			20,061			4.3
Foreign tax effects		3,937			0.5			2,763			0.4			3,351			0.7
Effect of cross-border tax laws		(1,670	)		(0.2	)		(1,548	)		(0.2	)		(1,032	)		(0.2	)
Tax credits:
Work opportunity tax credit		(5,272	)		(0.7	)		(5,849	)		(0.9	)		(5,482	)		(1.2	)
Other		(138	)		(0.0	)		(138	)		(0.0	)		(138	)		(0.0	)
Non-taxable or non-deductible expenses:
Section 162(m): limit on compensation		9,434			1.1			6,794			1.0			5,996			1.3
Other		(2,778	)		(0.3	)		2,620			0.4			1,192			0.2
Changes in unrecognized tax benefits		(1,803	)		(0.2	)		(1,593	)		(0.2	)		(1,408	)		(0.3	)
Loss from extinguishment of convertible debt		—			—			—			—			6,757			1.5
Other		(401	)		(0.1	)		(1,787	)		(0.3	)		(985	)		(0.2	)
Effective tax rate	$	205,965			25.2	%	$	171,175			25.4	%	$	126,124			27.1	%

(a) The majority of the state and local tax expense is attributable to California, Florida, Illinois, New York, and New York City.

The tax effects of temporary differences are included in deferred tax accounts as follows:


	(in thousands)
	January 31, 2026					February 1, 2025
	Tax Assets			Tax Liabilities		Tax Assets			Tax Liabilities
Non-current deferred tax assets and liabilities:
Property and equipment basis adjustments	$	—		$	316,248	$	—		$	264,774
Operating lease liability		1,016,097			—		950,808			—
Operating lease asset		—			933,642		—			879,433
Intangibles—indefinite-lived		—			63,664		—			63,791
Employee benefit compensation		38,613			—		31,917			—
State net operating losses (net of federal benefit)		3,203			—		4,513			—
Tax credits		8,783			—		8,342			—
Other		—			20,369		—			35,653
Valuation allowance		(8,405	)		—		(8,942	)		—
Total non-current deferred tax assets and liabilities	$	1,058,291		$	1,333,923	$	986,638		$	1,243,651
Net deferred tax liability				$	275,632				$	257,013

As of January 31, 2026, the Company has a deferred tax asset related to state net operating losses of $3.2 million which will expire at various dates between 2036 and 2040. As of January 31, 2026, the Company had tax credit carry-forwards totaling $8.8 million, inclusive of $8.3 million in foreign tax credits, which will begin to expire in Fiscal 2033 and $0.5 million in state tax credit carry-forwards, which will begin to expire in Fiscal 2026.

As of February 1, 2025, the Company had a deferred tax asset related to net operating losses of $4.5 million, inclusive of $4.1 million of state net operating losses, and $0.4 million of deferred tax assets recorded for Puerto Rico net operating loss carry-forwards. As of February 1, 2025, the Company had tax credit carry-forwards totaling $8.3 million, inclusive of $4.9 million in foreign tax credits, and $3.4 million in state tax credit carry-forwards.

The Company believes it is more likely than not that certain credits will not be realized. To account for this risk, the Company has established a valuation allowance totaling $8.4 million, inclusive of $8.3 million for foreign tax credit carry-forwards and $0.1 million for state tax credit carry-forwards. If the Company’s assumptions change and it determines that these tax credits can be realized, the resulting tax benefits from reversing the valuation allowance on deferred tax assets as of January 31, 2026 will be recorded to the Company’s Consolidated Statement of Income. As of February 1, 2025, the Company provided a valuation allowance

totaling $8.9 million, inclusive of $4.9 million for foreign tax credit carry-forwards, $0.6 million for state net operating losses, $3.0 million for state tax credit carry-forwards, and $0.4 million for Puerto Rico net operating loss carry-forwards.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (exclusive of interest and penalties) is as follows:


	(in thousands)
	Gross Unrecognized Tax Benefits, Exclusive of Interest and Penalties
Balance at January 28, 2023	$	3,933
Additions for tax positions of the current year		—
Additions for tax positions of prior years		—
Reduction for tax positions of prior years		(783	)
Settlements		—
Lapse of statute of limitations		(18	)
Balance at February 3, 2024		3,132
Additions for tax positions of the current year		—
Additions for tax positions of prior years		—
Reduction for tax positions of prior years		(783	)
Settlements		—
Lapse of statute of limitations		—
Balance at February 1, 2025		2,349
Additions for tax positions of the current year		—
Additions for tax positions of prior years		—
Reduction for tax positions of prior years		(783	)
Settlements		—
Lapse of statute of limitations		—
Balance at January 31, 2026	$	1,566

As of January 31, 2026, the Company reported total unrecognized benefits of $1.6 million, of which $1.2 million would affect the Company’s effective tax rate if recognized. As a result of previous positions taken and current period activity, the Company recorded a net benefit of $1.2 million of interest and penalties during Fiscal 2025 in the line item “Income tax expense” in the Company’s Consolidated Statements of Income. Cumulative interest and penalties of $4.3 million are recorded in the line item “Other liabilities” in the Company’s Consolidated Balance Sheet as of January 31, 2026. The Company recognizes interest and penalties related to unrecognized tax benefits as part of income taxes.

As of February 1, 2025, the Company reported total unrecognized benefits of $2.3 million, of which $1.9 million would affect the Company’s effective tax rate if recognized. As a result of previous positions taken, the Company recorded a net benefit of $1.0 million of interest and penalties during Fiscal 2024 in the line item “Income tax expense” in the Company’s Consolidated Statements of Income. Cumulative interest and penalties of $5.8 million are recorded in the line item “Other liabilities” in the Company’s Consolidated Balance Sheets as of February 1, 2025.

The Company files tax returns in the U.S. federal jurisdiction, Puerto Rico, and various state and local jurisdictions. The Company is open to examination by the IRS under the applicable statutes of limitations for Fiscal Years 2022 through 2025. The Company or its subsidiaries’ state and Puerto Rico income tax returns are open to audit for Fiscal Years 2021 through 2025 with a few exceptions, under the applicable statutes of limitations. There are ongoing state audits in several jurisdictions, and the Company has accrued for possible exposures as required under Topic No. 740. The Company does not expect the settlement of these audits to have a material impact to its financial results.

Historical Timeline

Fiscal Year	Filed
2026	Mar 19, 2026	Showing above
2025	Mar 17, 2025

2024	Mar 15, 2024

2023	Mar 13, 2023

2022	Mar 16, 2022

2021	Mar 15, 2021

2020	Mar 13, 2020

2019	Mar 20, 2019

2018	Mar 20, 2018

2017	Mar 16, 2017

2016	Mar 15, 2016

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

Burlington Stores, Inc. Income Taxes Disclosure

Historical Timeline

About Income Taxes Disclosures

Other Available Disclosures