Note 11 - Provision for Income Taxes

3 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Text Block]

11.   Provision for Income Taxes

Onvia has recorded a valuation allowance for the majority of its net deferred tax assets because it has a history of net operating losses (“NOLs”). As of December 31, 2012, the Company has recognized net deferred tax benefits in the amount of $2,175,000.  No additional deferred tax benefits were recognized in the first three quarters of 2013.  Onvia will continue to evaluate the likelihood that these tax benefits may be realized, and may reverse all or a portion of its valuation allowance in the future if it is determined that realization of these benefits is more likely than not.

Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), utilization of NOL carryforwards to offset future taxable income are subject to substantial annual limitations if we experience a cumulative change in ownership as defined by the Code. In general, an ownership change, as defined by the Code, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period.

As of March 31, 2013, Onvia’s federal NOL carryforwards for income tax purposes were approximately $72.4 million.  The federal NOL carryforwards are subject to limitations under Section 382 of the Internal Revenue Code. If not utilized, the federal NOL carryforwards will begin to expire in 2022.  The latest date available for a portion of the federal NOL carryforwards to be utilized to offset future income is 2030.