Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

v3.19.1
INCOME TAXES
12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 13. INCOME TAXES

The components of the provision consist of the following for the years ended December 31, 2018 and 2017:

 

 

 

2018

 

 

2017

 

Current:

 

 

 

 

 

 

 

 

Federal

 

$

258,617

 

 

$

420,967

 

State

 

 

42,015

 

 

 

7,197

 

Total current

 

 

300,632

 

 

 

428,164

 

Deferred:

 

 

 

 

 

 

 

 

Federal

 

 

(89,983

)

 

 

145,602

 

State

 

 

(13,851

)

 

 

(9,193

)

Total deferred

 

 

(103,834

)

 

 

136,409

 

Provision for income taxes

 

$

196,798

 

 

$

564,573

 

 

The income tax provision differs from that computed at the federal statutory corporate income tax rate as follows for the years ended December 31, 2018 and 2017:

 

 

 

2018

 

 

2017

 

Tax provision computed at the federal statutory rate

 

$

297,082

 

 

$

188,072

 

State income tax, net of federal benefit

 

 

24,981

 

 

 

(523

)

Permanent items

 

 

34,084

 

 

 

163,388

 

Credits

 

 

(103,572

)

 

 

(52,285

)

True ups and rounding

 

 

4,624

 

 

 

145,121

 

Change in federal statutory rate, net of benefit

 

 

(45,037

)

 

 

132,377

 

Uncertain tax positions

 

 

(15,364

)

 

 

(11,577

)

Provision for income taxes

 

$

196,798

 

 

$

564,573

 

 

The tax effects of significant temporary differences representing net deferred tax assets and liabilities consisted of the following at December 31, 2018 and 2017:

 

 

 

2018

 

 

2017

 

Deferred Tax Assets:

 

 

 

 

 

 

 

 

Intangible assets

 

$

143,332

 

 

$

135,068

 

Accruals and reserves

 

 

53,802

 

 

 

22,678

 

Other

 

 

307,687

 

 

 

177,681

 

Total deferred tax assets

 

 

504,821

 

 

 

335,427

 

 

 

 

 

 

 

 

 

 

Deferred Tax Liabilities:

 

 

 

 

 

 

 

 

Basis difference in fixed assets

 

 

(128,723

)

 

 

(104,779

)

Other

 

 

(41,616

)

 

 

 

Total deferred tax liabilities

 

 

(170,339

)

 

 

(104,779

)

 

 

 

 

 

 

 

 

 

Net deferred tax assets

 

$

334,482

 

 

$

230,648

 

 

In accordance with ASC 740, we considered the need for a valuation allowance against the net deferred tax assets at December 31, 2018 and determined that, based upon available evidence, it is more likely than not that certain of our deferred tax assets will be realized and, as such, have not recorded any valuation allowance.  

 

The aggregate changes in the balance of gross unrecognized tax benefits (included as part of accrued expenses in the accompanying financial statements), which excludes interest and penalties, are as follows as of and for the years ended December 31, 2018 and 2017:

 

 

 

2018

 

 

2017

 

Beginning balance:

 

$

44,488

 

 

$

56,886

 

Increases related to tax positions taken during the current

   year

 

 

19,765

 

 

 

5,229

 

Decreases related to expiration of statute of limitations

 

 

(35,129

)

 

 

(16,806

)

Other adjustments

 

 

 

 

 

(821

)

Ending Balance:

 

$

29,124

 

 

$

44,488

 

 

Our total liability for unrecognized gross tax benefits was $29,124 as of December 31, 2018, which, if ultimately recognized, would impact the effective tax rate in future periods. We are subject to examination by the Internal Revenue Service for fiscal years 2015 and thereafter.  For states within the U.S. in which we conduct significant business, we generally remain subject to examination for fiscal years 2015 and thereafter, unless extended for longer periods under state laws. We have no accrual for interest or penalties related to uncertain tax positions at December 31, 2018 and 2017, and did not recognize interest or penalties in the statements of operations during the years ended December 31, 2018 and 2017 as such amounts would be immaterial, if any.

As of December 31, 2018, we expected to use our foreign tax credits of $76,125 to offset federal income tax owed in 2018.