| INCOME TAXES |
NOTE 15. INCOME TAXES
The components of the provision (benefit) consist of the following at December 31, 2015 and 2014:
|
|
|
2015
|
|
|
2014
|
|
|
Current:
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
142,482
|
|
|
$
|
6,430
|
|
|
State
|
|
|
12,277
|
|
|
|
3,305
|
|
|
Total current
|
|
$
|
154,759
|
|
|
$
|
9,735
|
|
|
Deferred:
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
98,822
|
|
|
|
350,338
|
|
|
State
|
|
|
(1,952
|
)
|
|
|
1,115
|
|
|
Change in valuation allowance
|
|
|
—
|
|
|
|
(221,443
|
)
|
|
Total deferred
|
|
$
|
96,870
|
|
|
$
|
130,010
|
|
|
Provision (benefit) for income taxes
|
|
$
|
251,629
|
|
|
$
|
139,745
|
|
The income tax provision (benefit) differs from that computed at the federal statutory corporate income tax rate as follows for years ended December 31, 2015 and 2014:
|
|
|
2015
|
|
|
2014
|
|
|
Tax provision/(benefit) computed at the federal statutory rate
|
|
$
|
155,841
|
|
|
$
|
68,787
|
|
|
State income tax (provision), net of federal benefit
|
|
|
6,112
|
|
|
|
3,067
|
|
|
Permanent items
|
|
|
93,300
|
|
|
|
95,916
|
|
|
Credits
|
|
|
(72,050
|
)
|
|
|
(83,978
|
)
|
|
True ups and rounding
|
|
|
553
|
|
|
|
206,719
|
|
|
Change in valuation allowance
|
|
|
—
|
|
|
|
(221,443
|
)
|
|
Uncertain tax positions
|
|
|
67,873
|
|
|
|
70,677
|
|
|
Income tax provision (benefit)
|
|
$
|
251,629
|
|
|
$
|
139,745
|
|
The tax effects of significant temporary differences representing net deferred tax assets and liabilities consisted of the following at December 31, 2015 and 2014:
|
|
|
2015
|
|
|
2014
|
|
|
Deferred Tax Assets:
|
|
|
|
|
|
|
|
|
|
Current deferred tax assets
|
|
$
|
43,017
|
|
|
$
|
48,000
|
|
|
Intangible assets
|
|
|
185,000
|
|
|
|
96,000
|
|
|
Unrealized foreign currency translation
|
|
|
39,000
|
|
|
|
8,000
|
|
|
Research & development credits
|
|
|
110,000
|
|
|
|
205,000
|
|
|
Other
|
|
|
78,562
|
|
|
|
50,035
|
|
|
Total deferred tax assets
|
|
|
455,579
|
|
|
|
407,035
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Tax Liabilities:
|
|
|
|
|
|
|
|
|
|
Basis difference in fixed assets
|
|
|
(194,000
|
)
|
|
|
(148,000
|
)
|
|
Uncertain tax positions
|
|
|
(136,000
|
)
|
|
|
(68,000
|
)
|
|
Total deferred tax liabilities
|
|
|
(330,000
|
)
|
|
|
(216,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Gross deferred tax asset (liability)
|
|
|
125,579
|
|
|
|
191,035
|
|
|
Less: valuation allowance
|
|
|
—
|
|
|
|
—
|
|
|
Net deferred tax assets
|
|
$
|
125,579
|
|
|
$
|
191,035
|
|
In accordance with ASC Topic 740, we analyzed our valuation allowance at December 31, 2015 and determined that, based upon available evidence, it is more likely than not that certain of its deferred tax assets will be realized and, as such, has removed any valuation allowance against certain deferred tax assets. We anticipate utilization of both our foreign tax credits and research credit carryforwards.
As of December 31, 2015, we expect to use all of our foreign tax credits of $26,173. The foreign tax credits will be used to offset federal income tax owed in 2015.
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