Note 13 - Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Text Block]

13.   Income Taxes

Income tax expense (benefit) for the years ended December 31, 2010, 2011 and 2012 is summarized below:

	For the Years Ended December 31,
	2010			2011			2012
Federal income taxes
Current	$	(3,015	)	$	(2,033	)	$	53,969
Deferred		278,383			(75,765	)		(20,261,348	)
Total federal tax expense (benefit)		275,368			(77,798	)		(20,207,379	)
State income taxes
Current		184,726			25,000			2,380
Deferred		149,715			302,727			(4,662,842	)
Total state tax expense (benefit)		334,441			327,727			(4,660,462	)
Total tax expense (benefit)	$	609,809		$	249,929		$	(24,867,841	)

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, 2011 and 2012 are presented below:

		December 31,
	2011 ¹		2012
Deferred tax liabilities:
Amortization	$	(28,374,977)	$	(10,129,938)
Depreciation		(13,924,912)		(11,685,694)
Amortized intangibles		(5,796,972)		(839,560)
Prepaid expense		(353,285)		(430,896)
Other		(15,523)		(14,976)
Total deferred tax liabilities	$	(48,465,669)	$	(23,101,064)
Deferred tax assets:
Federal net operating loss carryforwards	$	6,058,180	$	4,426,198
Alternative minimum credits carryforwards		504,130		555,690
State net operating loss carryforwards		438,786		769,262
Restructuring expense		-		632,170
Deferred compensation		297,468		322,644
Advance payments		256,218		327,718
Bad debt		298,683		704,147
Other		327,288		381,328
Total deferred tax assets	$	8,180,753	$	8,119,157

 ¹    The 2011 balances include net deferred tax liabilities in the amount of $2,233,458 related to the STC stock acquisition that occurred on October 14, 2011. In 2012 the acquired net deferred tax liability was adjusted to $1,889,202. See note 4, Acquisitions, above.

As of December 31, 2012 the Company has U.S.  federal and state net operating loss carryforwards of $12.6 million and $23.9 million, respectively.  These net operating loss carryforwards expire at various times beginning in 2021 through 2032.  These acquired losses are subject to annual limitations imposed by Section 382 of the Internal Revenue Code.  These net operating loss carryforwards are more likely than not to be used prior to their expiration.

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, 2010, 2011, and 2012, the company did not identify any material uncertain tax positions.  Tax years from 2006 forward remain open for audit.

Total income tax expense (benefit) was different than that computed by applying U.S.  federal income tax rates to income (loss) before income taxes for the years ended December 31, 2010, 2011 and 2012.  The reasons for the differences are presented below:

	For the Years Ended December 31,
	2010			2011			2012
Federal income tax at statutory rate		35	%		35	%		35	%
Federal income tax provision (benefit) at statutory rate	$	455,183		$	856,571		$	(53,126,353	)
State income tax provision (benefit), net of federal income tax effects		217,387			213,022			(3,029,300	)
Goodwill Impairment		-			-			31,418,821
Change in fair value of derivative		307,482			(781,466	)		(84,503	)
Other		(370,243	)		(38,198	)		(46,506	)
Provision (benefit) on income taxes	$	609,809		$	249,929		$	(24,867,841	)
Effective income tax rate		46.9	%		10.2	%		16.4	%