Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

v3.3.1.900
INCOME TAXES
12 Months Ended
Dec. 31, 2015
Income Tax Disclosure [Abstract]  
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.