LANDSTAR SYSTEM INCLSTR
LANDSTAR SYSTEM INC Income Taxes Disclosure
(4) Income Taxes
The provisions for income taxes consisted of the following (in thousands):
Fiscal Years |
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2025 |
2024 |
2023 |
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| Current: |
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| Federal |
$ | 28,799 | $ | 54,621 | $ | 76,827 | ||||||
| State |
3,099 | 9,750 | 13,305 | |||||||||
| Foreign |
1,029 | 999 | 1,278 | |||||||||
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| Total current |
$ | 32,927 | $ | 65,370 | $ | 91,410 | ||||||
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| Deferred: |
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| Federal |
$ | 2,272 | $ | (5,441 | ) | $ | (8,410 | ) | ||||
| State |
375 | (1,549 | ) | 701 | ||||||||
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| Total deferred |
$ | 2,647 | $ | (6,990 | ) | $ | (7,709 | ) | ||||
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| Total: |
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| Federal |
$ | 31,071 | $ | 49,180 | $ | 68,417 | ||||||
| State |
3,474 | 8,201 | 14,006 | |||||||||
| Foreign |
1,029 | 999 | 1,278 | |||||||||
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| Total income taxes |
$ | 35,574 | $ | 58,380 | $ | 83,701 | ||||||
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The provision for income taxes was based on income before income taxes which consisted of the following (in thousands):
Fiscal Years |
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2025 |
2024 |
2023 |
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| United States |
$ | 148,000 | $ | 250,586 | $ | 345,146 | ||||||
| Foreign |
2,581 | 3,740 | 2,949 | |||||||||
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| Income before income taxes |
$ | 150,581 | $ | 254,326 | $ | 348,095 | ||||||
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Temporary differences and carryforwards which gave rise to deferred tax assets and liabilities consisted of the following (in thousands):
Dec. 27, 2025 |
Dec. 28, 2024 |
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| Deferred tax assets: |
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| Receivable valuations |
$ | 9,356 | $ | 7,899 | ||||
| Share-based payments |
1,212 | 1,139 | ||||||
| Self-insured claims |
8,006 | 4,659 | ||||||
| Other |
14,445 | 11,411 | ||||||
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| Total deferred tax assets |
$ | 33,019 | $ | 25,108 | ||||
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| Deferred tax liabilities: |
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| Operating property |
$ | 44,263 | $ | 35,131 | ||||
| Goodwill |
4,942 | 4,366 | ||||||
| Other |
4,723 | 3,213 | ||||||
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| Total deferred tax liabilities |
$ | 53,928 | $ | 42,710 | ||||
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| Net deferred tax liability |
$ | 20,909 | $ | 17,602 | ||||
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The following table summarizes the differences between income taxes calculated at the federal income tax rate of 21% on income before income taxes and the provisions for income taxes (in thousands):
Fiscal Year 2025 |
Fiscal Year 2024 |
Fiscal Year 2023 |
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Amount |
Percent |
Amount |
Percent |
Amount |
Percent |
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U.S federal statutory income tax rate |
$ | 31,622 | 21.0 | % | $ | 53,409 | 21.0 | % | $ | 73,100 | 21.0 | % | ||||||||||||
State and local income taxes, net of federal income tax effect (1) |
4,128 | 2.7 | % | 5,596 | 2.2 | % | 9,703 | 2.8 | % | |||||||||||||||
Foreign tax effects |
487 | 0.3 | % | 214 | 0.1 | % | 659 | 0.2 | % | |||||||||||||||
Effect of cross-border tax laws |
(50 | ) | 0.0 | % | (59 | ) | 0.0 | % | (69 | ) | 0.0 | % | ||||||||||||
Tax credits |
(749 | ) | (0.5 | %) | (2,591 | ) | (1.0 | %) | (1,672 | ) | (0.5 | %) | ||||||||||||
Non-taxable and non-deductible items |
1,468 | 1.0 | % | 913 | 0.3 | % | 518 | 0.1 | % | |||||||||||||||
Changes in unrecognized tax benefits |
(1,443 | ) | (1.0 | )% | 929 | 0.4 | % | 1,421 | 0.4 | % | ||||||||||||||
Other adjustments, net |
111 | 0.1 | % | (31 | ) | 0.0 | % | 41 | 0.0 | % | ||||||||||||||
Effective tax rate |
$ | 35,574 | 23.6 | % | $ | 58,380 | 23.0 | % | $ | 83,701 | 24.0 | % | ||||||||||||
(1) |
State taxes in Florida, Illinois, California and Texas make up the majority (greater than 50 percent) of the tax effect in this category. |
The Company files a consolidated U.S. federal income tax return. The Company or its subsidiaries file state tax returns in the majority of the U.S. state tax jurisdictions. With few exceptions, the Company and its subsidiaries are no longer subject to U.S. federal or state income tax examinations by tax authorities for 2021 and prior years. The Company’s wholly-owned Canadian subsidiary, Landstar Canada, Inc., is subject to Canadian income and other taxes. The Company’s wholly-owned Mexican subsidiaries, Landstar Holdings, S. de R.L.C.V. and Landstar Metro, S.A.P.I. de C.V., are subject to Mexican income and other taxes. The Company’s Canadian and Mexican subsidiaries also may each be subject to U.S. income and other taxes.
As of December 27, 2025 and December 28, 2024, the Company had $3,953,000 and $5,396,000, respectively, of net unrecognized tax benefits representing the provision for the uncertainty of certain tax positions plus a component of interest and penalties. Estimated interest and penalties on the provision for the uncertainty of certain tax positions is included in income tax expense. At December 27, 2025 and December 28, 2024, there was $1,345,000 and $1,793,000, respectively, accrued for estimated interest and penalties related to the uncertainty of certain tax positions. The Company does not currently anticipate any significant increase or decrease to the unrecognized tax benefit during fiscal year 2026.
The following table summarizes the rollforward of the total amounts of gross unrecognized tax benefits for fiscal years 2025 and 2024 (in thousands):
Fiscal Years |
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2025 |
2024 |
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Gross unrecognized tax benefits – beginning of the year |
$ | 6,571 | $ | 5,454 | ||||
Gross increases related to current year tax positions |
430 | 598 | ||||||
Gross increases related to prior year tax positions |
444 | 1,344 | ||||||
Lapse of statute of limitations |
(2,625 | ) | (825 | ) | ||||
Gross unrecognized tax benefits – end of the year |
$ | 4,820 | $ | 6,571 | ||||
Landstar paid income taxes of $51,451,000 in fiscal year 2025, $47,528,000 in fiscal year 2024 and $92,695,000 in fiscal year 2023, which consisted of the following (in thousands):
Fiscal Years |
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2025 |
2024 |
2023 |
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Federal |
$ | 44,000 | $ | 41,000 | $ | 76,000 | ||||||
State |
5,807 | 6,137 | 14,928 | |||||||||
Foreign |
1,644 | 391 | 1,767 | |||||||||
Total income taxes paid, net of refunds |
$ | 51,451 | $ | 47,528 | $ | 92,695 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 19, 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.