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Note 9 - Income Taxes
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6 Months Ended |
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Mar. 31, 2014
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| Income Tax Disclosure [Abstract] | |
| Income Tax Disclosure [Text Block] |
Note 9. Income Taxes
For the three and six months ended March 31, 2014, the Company recorded a provision for income taxes of $714,000 and $1,824,000, respectively, reflecting an effective tax rate of 36.8% and 36.2%, respectively. The primary difference between the effective tax rate and the statutory tax rate is related to nondeductible meals and entertainment expenses and expenses related to equity award compensation.
As of both March 31, 2014 and September 30, 2013, the Company had a remaining valuation allowance of approximately $975,000 related to state net operating loss carry-forwards the Company does not expect to utilize. Based on the Company’s analysis and review of long-term forecasts and all available evidence, the Company has determined that there should be no change in this existing valuation allowance in the current quarter.
For the three and six months ended March 31, 2013, the Company recorded a provision for income taxes of $427,000 and $793,000, respectively, reflecting an effective tax rate of 43.9% and 42.1%, respectively. The primary difference between the effective tax rate and the statutory tax rate is related to nondeductible meals and entertainment expenses and expenses related to equity award compensation.
Deferred taxes recognize the impact of temporary differences between the amounts of the assets and liabilities recorded for financial statement purposes and these amounts measured in accordance with tax laws. The Company’s realization of net operating loss carry-forwards and other deferred tax temporary differences is contingent upon future taxable earnings. The Company reviewed its deferred tax asset for expected utilization using a “more likely than not” criteria by assessing the available positive and negative factors surrounding its recoverability.
As of March 31, 2014, we do not have any unrecognized tax benefits. It is the Company’s practice to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company does not expect any material changes in its unrecognized tax positions over the next 12 months.
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