18. INCOME TAXES

12 Months Ended

Oct. 31, 2016

Income Tax Disclosure [Abstract]

18. INCOME TAXES

The following is the composition of income tax (benefit) expense:

	2016		2015
Current:
Federal	$	374,551	$	(79,333	)
State		84,270		138
Total current	$	458,821	$	(79,195	)
Deferred:
Federal	$	216,202	$	(5,411	)
State		29,095		(174,270	)
Total deferred		245,297		(179,681	)
Total income tax expense (benefit)	$	704,118	$	(258,876	)

Deferred tax assets (liabilities) at October 31, 2016 and 2015, are as follows:

	2016			2015
Deferred tax assets:
Allowance for doubtful accounts	$	102,110		$	116,333
Accrued compensation		217,064			212,284
Accruals and reserves		269,868			126,192
Charitable contributions		14,064			79,903
Interest rate swaps		12,981			3,565
Subpart F Income		9,595			-
State credits and NOLs		66,691			68,383
Total deferred tax assets		692,373			606,660
Deferred tax liabilities:
Depreciation		(1,711,018	)		(1,715,035	)
Amortization		(2,761,082	)		(2,435,471	)
Total deferred tax liabilities		(4,472,100	)		(4,150,506	)
Net deferred tax liability	$	(3,779,727	)	$	(3,543,846	)

Income tax expense differs from the amount computed by applying the statutory tax rate to net income (loss) before income tax expense as follows:

	2016			2015
Income tax (benefit) expense computed at the statutory rate		648,022		$	(300,028	)
State income taxes (benefit) expense, net of federal benefit		70,354			(29,615	)
Subpart F income		-			85,975
Meals and entertainment		28,592			33,738
Other differences		(42,850	)		(48,946	)
Income tax expense (benefit)	$	704,118		$	(258,876	)

The Company recognizes interest and penalties related to the unrecognized tax benefits in tax expense.  The Company had approximately $41,000 of interest and penalties accrued at October 31, 2016 and 2015.

Generally, the Company is subject to federal and state tax examinations by tax authorities for years after October 31, 2013.