(6) Income Taxes

The provision for income taxes was comprised of the following for the nine months ended June 30, 2014 and 2013:


	6/30/2014		6/30/2013
Current
Federal	$	2,113,900	$	1,011,800
State		580,700		208,500

		2,694,600		1,220,300

Deferred
Federal		1,016,800		854,400
State		184,100		195,700

		1,200,900		1,050,100

Total	$	3,895,500	$	2,270,400

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities as of June 30, 2014 and September 30, 2013 are presented below:


	6/30/2014			9/30/2013
Current deferred tax assets:
Accrued compensation	$	23,900		$	19,900
Deferred rent		28,300			12,600
Capital loss carryforward		10,600			110,400
State taxes		178,300			129,300

Gross deferred tax assets		241,100			272,200
Less: disallowed capital loss		(10,600	)		(110,400	)

Net deferred tax assets		230,500			161,800

Noncurrent deferred tax liabilities:
Stock based compensation		58,000			—
Property and equipment		(30,000	)		(46,000	)
Management contracts		(7,122,500	)		(5,779,000	)

Total deferred tax liabilities		(7,094,500	)		(5,825,000	)

Net deferred tax liabilities	$	(6,864,000	)	$	(5,663,200	)

The Company’s effective tax rates for the nine months ended June 30, 2014 and 2013 were 42.5% and 41.1%, respectively, and differ from the federal statutory rate of 34% for the following principal reasons:


	6/30/2014			6/30/2013
Federal tax at statutory rate		34.0	%		34.0	%
True-up of prior year’s tax provision		2.5	%		(0.2	)%
State tax at statutory rate		5.5	%		5.8	%
Permanent differences		0.4	%		0.7	%
Disallowed capital loss		0.1	%		0.8	%

Effective Tax Rate		42.5	%		41.1	%

The effective tax rate, which is normally about 40%, was higher for the period ended June 30, 2014 as a result of a one-time tax charge to true-up the prior year tax provision due to the inability to deduct for income tax purposes certain compensation expenses under Section 162(m) of the United States Internal Revenue Code of 1986, as amended. The effective tax rate was higher for the period ended June 30, 2013 due to a disallowed capital loss carryforward created by a realized loss on the sale of the available for sale investment.