Note 9 - Impact of Tax Reform Act

3 Months Ended

Jan. 31, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

9. IMPACT OF TAX REFORM ACT

On

December 22, 2017,

H.R.

1,

originally known as the Tax Cuts and Jobs Act (the “Tax Reform Act”) was enacted. The Tax Reform Act made significant changes to U.S. federal income tax laws including permanently lowering the U.S. corporate income tax rate from

35%

to

21%

effective

January 1, 2018.

As the Company has an

October 31

fiscal year-end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory rate of

23%

for the fiscal year ending

October 31, 2018.

The Company’s statutory federal tax rate will be

21%

for fiscal years ending

October 31, 2019

and beyond. U.S. GAAP requires the impact of tax legislation be recognized in the period in which the law was enacted. In

December 2017,

the SEC issued Staff Accounting Bulletin

No.

118,

which allows a company to report provisional numbers related to the Tax Reform Act and adjust those amounts during a measurement period

not

to extend beyond

one

year. For the

three

months ended

January 31, 2018,

the Company recorded a

one

-time tax benefit of

$1,400,000

due to a remeasurement of deferred tax assets and liabilities. In addition, applying the reduced rate of

23%

to our

first

fiscal quarter earnings resulted in an

$1,400,000

reduction to tax expense. These tax benefits represent provisional amounts and the Company’s best estimate. The provisional amounts are based on estimates of underlying timing differences (primarily related to uncertainty in fixed assets) and the Company’s current interpretations of the Tax Reform Act. The ultimate impact of the Tax Reform Act

may

differ from our provisional amounts due to changes in interpretations and assumptions we made as well as any forthcoming legislative action or regulatory guidance.