Income Taxes

12 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesDeferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax

effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are as follows (in thousands):

	March 31,
	2023		2022
Deferred tax assets:
Accrued expenses	$	1,529	$	364
Deferred stock compensation	1,605		662
Bad debt and inventory reserves	21		27
Total deferred tax assets	3,155		1,053
Deferred tax liabilities:
Property and equipment	(2,527)		(1,989)
Total net deferred tax assets (liabilities)	$	628	$	(936)

At March 31, 2023, the Company had no federal or state net operating loss carryforwards.

The components of the income tax provision consist of the following (in thousands):

	Year Ended March 31,
	2023		2022		2021
Current taxes
Federal	$	1,831	$	5,801	$	7,446
State	1,084		515		856
Total current taxes	2,915		6,316		8,302
Deferred taxes
Federal	(982)		(317)		279
State	(582)		(28)		32
Total deferred taxes	(1,564)		(345)		311
Total provision for income taxes	$	1,351	$	5,971	$	8,613

The reconciliation of income tax provision computed at the U.S. federal statutory tax rates to income tax expense is as follows (in thousands):

	Year Ended March 31,
	2023		2022		2021
Income taxes at U.S. statutory rates	$	333	$	5,685	$	8,235
State income taxes, net of federal tax benefit	275		379		708
Permanent differences	396		59		198
Restricted stock shortfall (windfall) adjustment	208		33		(135)
Other	139		(185)		(393)
Total provision for income taxes	$	1,351	$	5,971	$	8,613

In fiscal 2023, the Company recognized a stock compensation shortfall charge of approximately $208 thousand and recognized a one-time charge of approximately $382 thousand related to a return to provision true up of the fiscal 2022 income tax provision. In fiscal 2022, the Company recognized a stock compensation shortfall charge of approximately $33 thousand, and recognized a one-time benefit of approximately $29 thousand, related to a return to provision true up of the fiscal 2021 income tax provision. In fiscal 2021 the Company recognized a stock compensation windfall benefit of approximately $135 thousand, and recognized a one-time benefit of approximately $194 thousand, related to a return to provision true up of the fiscal 2020 income tax provision.

The differences between the effective income tax rate and the statutory U.S. federal income tax rate are as follows:

	Year Ended March 31,
	2023		2022		2021
Federal rate on income before taxes	21.0	%	21.0	%	21.0	%
State income taxes, net of federal tax benefit	17.4	%	1.4	%	1.8	%
Permanent differences	25.0	%	0.2	%	0.5	%
Restricted stock shortfall (windfall) adjustments	13.1	%	0.1	%	(0.3)	%
Other	8.8	%	(0.6)	%	(1.0)	%
Total Effective Tax Rate	85.3	%	22.1	%	22.0	%

The primary drivers for the increase in effective tax rate for the fiscal 2023 include the recognition of permanent differences related to one-time acquisition costs and a non-deductible portion of restricted stock compensation. The state tax rate for fiscal 2023 includes continued expansion of operations as well as a one-time true up for new state filings for fiscal 2022.