11. INCOME TAXES

12 Months Ended

Dec. 31, 2012

Income Taxes

NOTE 11: INCOME TAXES

The provision for income taxes is comprised of the following for the years ended December 31, 2012 and 2011.  

	Year Ended
	December 31, 2012			December 31, 2011
Federal:
Current	$	15		$	–
Deferred		(520	)		–
Total	$	(505	)	$	–
State:
Current	$	37		$	(55	)
Deferred		520			–
Total	$	557		$	(55	)
Total income tax expense (benefit)	$	52		$	(55	)

The provision for income taxes differs from the amount computed by applying the U.S. statutory income tax rate before income taxes for the reasons set forth below for the years ended December 31, 2012 and 2011.

	Year Ended
	December 31, 2012			December 31, 2011
Income tax expense at federal statutory rate		34.00	%		34.00	%
State taxes, net of federal expense		(21.53	)%		4.41	%
Return to provision adjustments		24.30	%		44.42	%
Valuation allowance		(36.39	)%		(83.56	)%
Permanent differences		(2.57	)%		0.23	%
Other, net		0.00	%		(2.13	)%
Total effective rate		(2.19	)%		(2.63	)%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as operating loss and tax credit carry forwards.  The tax effects of the temporary differences and carry forwards are as follow at December 31, 2012 and 2011: 

	Year Ended
	December 31, 2012			December 31, 2011
Deferred tax assets:
Allowance for doubtful accounts	$	353		$	10
Net operating loss		4,249			5,801
Share-based compensation		990			523
Investment in joint venture		4,700			3,565
Other		122			36
Total deferred tax assets	$	10,414		$	9,935
Deferred tax liabilities:
Depreciation and amortization on property, plant and equipment	$	(2,360	)	$	(1,966	)
Amortization of intangibles		(41	)		(830	)
Total deferred tax liabilities	$	(2,401	)	$	(2,796	)
Less: valuation allowance		(8,013	)		(7,139	)
Net deferred tax position	$	–		$	–

We have $12,103 in net operating loss (“NOL”) carry forwards available to offset future taxable income.  These federal NOL’s will expire at various dates through 2028. Management analyzed its current operating results and future projections and determined that a full valuation allowance was needed due to our cumulative losses in recent years. We have no uncertain tax positions at December 31, 2012. Our tax returns from the tax years ended December 31, 2008 through December 31, 2011 are open to examination by the IRS.