Note 12 - Income Taxes

12 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(12) Income Taxes

As of the end of each of fiscal years 2024 and 2023, the Company’s gross liability for unrecognized tax benefits related to uncertain tax positions was $0.4 million and $0.4 million, respectively. If the tax benefits of such amounts were recognized, $0.3 million and $0.3 million of such amounts, respectively, would decrease the Company’s effective income tax rate.  As of September 30, 2024, and September 30, 2023,the Company’s net liability for accrued interest and penalties was $0.4 million and $0.3 million, respectively. The Company has elected to recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company recognized approximately $0.05 million in interest and penalties during each of the years ended September 30, 2024, and September 30, 2023.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Fiscal Years Ended September 30,
	2024		2023
	(In thousands)
Beginning year balance	$	353	$	353
Changes related to prior year tax positions		-		-
Ending year balance	$	353	$	353

The total amount of unrecognized tax benefits can change due to final regulations, audit settlements, tax examinations activities, lapse of applicable statutes of limitations, and the recognition and measurement criteria under the guidance related to accounting for uncertainly in income taxes. The Company is unable to estimate what this change could be within the next 12 months, but does not believe it would be material to its financial statements.

The Company’s income tax expense was as follows:

	Fiscal Years Ended September 30,
	2024		2023
	(In thousands)
Current
Federal	$	1,179	$	485
State		377		221
Total current		1,556		706
Deferred
Federal		828		955
State		223		168
Total deferred		1,051		1,123
Total	$	2,607	$	1,829

The principal reasons for the differences from the federal statutory income tax rate and the Company’s effective tax rate were as follows:

	Fiscal Years Ended September 30,
	2024			2023
Federal statutory income tax rate		21.0	%		21.0	%
State income taxes, net of federal benefit		4.1			4.0
Permanent and other differences		0.8			(0.4	)
Difference due to executive compensation		1.5			0.7
Tax return to provision adjustments		(0.1	)		0.8
Uncertain tax position		0.5			0.9
Stock-based compensation		(0.9	)		0.7
Effective income tax rate		26.9	%		27.7	%

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities were as follows:

	Fiscal Years Ended September 30,
	2024			2023
	(In thousands)
Deferred tax assets
Accrued compensation	$	-		$	37
Stock compensation		33			18
State taxes		224			176
Capital loss carryforward		-			7
Lease liability		258			70
Gross deferred tax assets		515			308
Disallowed capital loss		-			(7	)
Net deferred tax assets		515			301
Deferred tax liabilities
Property and equipment		(28	)		(31	)
Management contracts		(15,895	)		(14,807	)
ROU asset		(254	)		(74	)
Total deferred tax liabilities		(16,177	)		(14,912	)
Net deferred tax liabilities	$	(15,662	)	$	(14,611	)