Note 13 - Income Taxes

3 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

13—Income

Taxes

 

The Company files consolidated Federal and state income tax returns. Substantially all of the Company’s subsidiaries are single member limited liability companies and, therefore, do not file separate tax returns. Majority and minority owned subsidiaries file separate partnership tax returns. The expiration date for state net operating loss (“NOL”) carry forwards (from

September

 

30,

2009)

is

September

 

30,

2029.

The New Jersey NOL carry forward balance as of

December

 

31,

2016

is approximately

$73.9

million. In addition, the Company has New York State and City NOL of approximately

$16.5

million and

$1.0

million, respectively, as of

December

31,

2016.

There are

no

federal NOL carry forwards. 

The Company accounts for income taxes using the asset and liability method which requires the recognition of deferred tax assets and, if applicable, deferred tax liabilities, for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and, if applicable, liabilities. Additionally, the Company would adjust deferred taxes to reflect estimated tax rate changes, if applicable. The Company conducts periodic evaluations to determine whether it is more likely than not that some or all of its deferred tax assets will not be realized. Among the factors considered in this evaluation are estimates of future earnings, the future reversal of temporary differences and the impact of tax planning strategies that the Company can implement, if warranted. The Company is required to provide a valuation allowance for any portion of our deferred tax assets that, more likely than not, will not be realized at

December

 

31,

2016.

Based on this evaluation, the Company has a deferred tax asset valuation allowance of approximately

$6.3

million as of

December

 

31,

2016

as compared to

$6.1

million reported on

September

 

30,

2016.

Although the carry forward period for state income tax purposes is up to

twenty

years, given the economic conditions, such economic environment could limit growth over a reasonable time period to realize the deferred tax asset. The Company determined the time period allowance for carry forward is outside a reasonable period to forecast full realization of the deferred tax asset, therefore recognized the deferred tax asset valuation allowance. The Company continually monitors forecast information to ensure the valuation allowance is at the appropriate value. As required by FASB ASC

740,

Income Taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than

50

 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. 

The tax returns for the

2014

through

2016

fiscal years are subject to examination. The Company does

not

have any uncertain tax positions.