Note 8 - Income Tax

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8. Income Tax

Income tax expense for the years ended

December 31, 2020,

2019,

and

2018

is summarized below (in thousands):

	For the Years Ended December 31,
	2020			2019			2018
Federal income taxes
Current	$	1,532		$	443		$	1,036
Deferred		(24	)		1,717			898
Total federal tax expense		1,508			2,160			1,934
State income taxes
Current		505			574			503
Deferred		17			(341	)		308
Total state tax expense		522			233			811
Total income tax expense	$	2,030		$	2,393		$	2,745

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

December 31, 2020,

and

2019,

are presented below (in thousands):

	December 31,
	2020			2019
Deferred tax liabilities:
Amortization	$	(10,913	)	$	(11,133	)
Depreciation		(11,716	)		(10,934	)
Lease asset		(406	)		(306	)
Prepaid expense		(306	)		(506	)
Other		(7	)		(8	)
Total deferred tax liabilities	$	(23,348	)	$	(22,887	)
Deferred tax assets:
Deferred compensation	$	113		$	147
Advance payments		542			597
Lease liability		406			306
Bad debt		67			77
Consulting		499			—
Other		207			239
Total deferred tax assets	$	1,834		$	1,366

As of

December 31, 2020,

and

2019,

the Company had

no

U.S. federal and state net operating loss carryforwards. The Company had

no

alternative minimum tax credit carryforwards as of

December 31, 2020,

or

December 31, 2019.

The Company establishes valuation allowances when necessary to reduce deferred tax assets to amounts expected to be realized. As of

December 31, 2020,

the Company had

no

valuation allowance recorded. 

The effective income tax rates as of

December 31, 2020,

2019,

and

2018,

were

24.3%,

23.5%

and

22.5%,

respectively.

ASC

740

prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For each year ended

December 31, 2020,

2019,

and

2018,

the Company did

not

identify any material uncertain tax positions. Tax years from

2017

forward remain open for audit.

Total income tax expense was different than that computed by applying U.S. federal income tax rates to income before income taxes for the years ended

December 31, 2020,

2019,

and

2018.

The reasons for the differences are presented below (in thousands, except percentages):

	For the Years Ended December 31,
	2020			2019			2018
Federal income tax at statutory rate		21	%		21	%		21	%
Federal income tax provision at statutory rate	$	1,751		$	2,140		$	2,565
State income tax provision, net of federal income tax effects		434			548			641
Adjustments for prior years		(114	)		(222	)		(302	)
Other		(41	)		(73	)		(159	)
Provision for income taxes	$	2,030		$	2,393		$	2,745
Effective income tax rate		24.3	%		23.5	%		22.5	%