4.	INCOME TAXES:

Deferred taxes are determined based on the estimated future tax effects of differences between the financial statements and tax basis of assets and liabilities given the provision of the enacted tax laws. Significant components of the Company's deferred tax liabilities and assets as of

April 30, 2019

and

2018

are as follows (in thousands):

	April 30, 2019			April 30, 2018
Deferred tax liabilities:
Depreciation and amortization	$	(923	)	$	(112	)
Deferred compensation, restricted stock		(257	)		-
Total deferred tax liabilities		(1,180	)		(112	)

Deferred tax assets:
Accounts receivable allowance		39			30
Inventory and other allowances		194			154
Vacation accruals		25			31
Jackpot reserves		37			26
R&D credits		-			64
Total deferred tax assets		295			305
Less valuation allowance		-			-
Net deferred tax assets (liabilities)	$	(885	)	$	193

The reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

	April 30, 2019			April 30, 2018
Statutory federal income tax rate expense, net of noncontrolling interest		21.00	%		30.00	%
State income tax, net of federal benefits		1.90	%		8.16	%
Permanent tax		1.93	%		11.33	%
Other		1.46	%		11.82	%
		26.29	%		61.31	%

Income tax expense:
Deferred income tax	$	1,078		$	732
Current income tax (benefit)		297			(192	)
Total income tax expense	$	1,375		$	540

Current income tax expense (benefit) of

$297

and (

$192

) are comprised of

$170

and (

$295

) in federal income tax and

$127

and

$103

in state income tax for the years ended

April 30, 2019

and

2018,

respectively.

The Tax Cuts and Jobs Act (the "ACT") was enacted on

December 22, 2017.

The Act reduces the US Federal corporate income tax rate from

35%

21%

and required the Company to re-measure certain deferred tax assets and liabilities based on the rates at which they are anticipated to reverse in the future, which is generally

21%.

The Company adopted the new rate as it relates to the calculation of deferred tax amounts as of

April 30, 2018.

The Company believes that its income tax filing positions and deductions will be sustained on audit and does

not

anticipate any adjustments that will result in a material adverse effect on its financial condition, results of operations or cashflow. Therefore,

reserve for uncertain income tax position, interest or penalties, have been recorded.

The Company files income tax returns in the U.S. Federal jurisdiction and various state jurisdictions. The Company is

longer subject to U.S. Federal tax examinations for tax years beginning on

May 1, 2014

and prior. There are

current tax examinations.