Quarterly report pursuant to Section 13 or 15(d)

Note 10 - Income Taxes

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Note 10 - Income Taxes
 9 Months Ended
Jun. 30, 2017
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
Note
10.
Income Taxes
 
For the
three
and
nine
months ended
June 30, 2017,
the Company recorded a provision for income taxes of
$593,000
and
$1,393,000,
respectively, reflecting an effective tax rate of
42.5%
and
35.0%,
respectively. The primary difference between the effective tax rate and the statutory tax rate is related to nondeductible meals and entertainment, favorable domestic manufacturing deduction and research and development credits, expenses related to equity award compensation and unfavorable discrete items for the
three
and
nine
months ended
June 30, 2017
from tax shortfalls related to stock-based compensation awards.
 
As of both
June 30, 2017
and
September 30, 2016,
the Company had a remaining valuation allowance of approximately
$322,000
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 quarter ended
June 30, 2017.
 
For the
three
and
nine
months ended
June 30, 2016,
the Company recorded a provision for income taxes of
$1,141,392
and
$2,356,945,
respectively, reflecting an effective tax rate of
32.6%
and
30.6%,
respectively. The primary difference between the effective tax rate and the statutory tax rate is related to nondeductible meals and entertainment, expenses related to equity award compensation and favorable discrete items for the
three
and
nine
months ended
June 30, 2016
from tax benefits related to stock-based compensation awards and research and development credits which were permanently extended in
December 2015
by the federal government.
 
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 deferred tax temporary differences is contingent upon future taxable earnings. The Company reviewed its deferred tax assets for expected utilization using a “more likely than
not”
criteria by assessing the available positive and negative factors surrounding its recoverability.
 
As of
June 30, 2017,
we do
not
have any unrecognized tax benefits. It is the Company’s practice to recognize interest and penalties accrued on any unrecognize
d 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.