Note 9 - Income Taxes
|12 Months Ended|
Dec. 31, 2017
|Notes to Financial Statements|
|Income Tax Disclosure [Text Block]||
Income tax provision reported in the consolidated statements of operations is comprised of the following (in hundreds):
The following are the components of the Company’s net deferred taxes for federal and state income taxes (in hundreds):
2017Tax Act was signed into law on
December 22, 2017.The
2017Tax Act significantly revises the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from
21%,eliminating certain deductions, imposing a mandatory
one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. The Company has
notcompleted its determination of the accounting implications of the
2017Tax Act on its accruals. However, it has reasonably estimated the effects of the
2017Tax Act and recorded a provisional tax expense in its financial statements as of
December 31, 2017of approximately
$3.9million. This amount is a remeasurement of federal net deferred tax assets resulting from the permanent reduction in the U.S. statutory corporate tax rate to
34%.As the Company completes its analysis of the
2017Tax Act, collects and prepares necessary data, and interprets any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, it
maymake adjustments to the provisional amounts.
December 31, 2017,the Company has federal and state net operating losses of approximately
$32,030,000respectively. These net operating losses are available to offset future taxable income and will begin to expire in
2035for federal purposes and
2025for state purposes.
The following is a reconciliation of the statutory federal income tax rate applied to pre-tax accounting net loss, compared to the income tax provision in the consolidated statement of operations (in hundreds):
The state tax benefit stems from the resolution of various voluntary disclosure agreements with multiple states where the Company had
notyet been in compliance. In addition, the Company is responsible to pay certain minimum and franchise taxes to jurisdictions in which it does business.
Changes in income tax expense related primarily to changes in pretax losses during the year ended
December 31, 2017,as compared to year ended
December 31, 2016,and the effective rate was
1.1%,respectively. The difference is primarily due to state taxes, stock compensation and the impact of enacted tax reform which is mostly offset by the valuation allowance.
For the year ended
December 31, 2017and,
2016,the Company recorded a liability for income taxes for operations and uncertain tax positions of
$40,000,respectively, of which
$27,000respectively, represent penalties and interest and are recorded in the “other liabilities” section of the accompanying consolidated balance sheets. Interest and penalties associated with tax positions are recorded in the period assessed as general and administrative expenses. Management made a determination that the Company was
notin compliance with several state and local tax jurisdictions in which the Company was doing business. Accordingly, management undertook to analyze its tax exposures, both income and otherwise, with respect to jurisdictions in which compliance was deemed to be inadequate and has entered into Voluntary Disclosure Agreements (VDAs) with the taxing authorities.
The following table sets forth a reconciliation of the beginning and ending amount of uncertain tax positions during the tax years ended
December 31, 2017and
The Company’s tax returns for tax years subject to examination by tax authorities include
2013through the current period for state and
2014through the current period for federal purposes.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/presentationRef