Income Taxes

6 Months Ended

Jun. 30, 2013

Income Taxes

Income Taxes

Note 5. Income Taxes

For the three and six months ended June 30, 2013 and 2012, the Company’s income tax expense and effective tax rates were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Income tax expense (benefit)	$	357,011		$	2,022,287		$	(6,136	)	$	2,822,544
Effective income tax rate	102.7		%	44.2		%	102.7		%	44.2		%

For the three and six months ended June 30, 2013, the Company’s statutory Federal income tax rate of 34.0% increased to the effective income tax rate of 102.7% as a result of an increase in the tax rate in Puerto Rico from 30% to 39% that will not generate offsetting U.S. income tax credits, the loss of a deferred tax asset as a result of the increase in the tax rate in Puerto Rico, permanent differences as a result of costs related the Transaction, and statutory taxes.  For the three and six months ended June 30, 2012, the Company’s statutory Federal income tax rate of 34.0% increased to the effective income tax rate of 44.2% as a result of increases in taxes in Puerto Rico that will not generate offsetting U.S. tax credits and permanent differences for meals and entertainment, respectively.