INCOME TAX

6 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 14 – INCOME TAX

The Tax Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The change has caused the Company to record a one-time income tax payable to be paid over 8 years. The one-time transition tax was calculated using the Company’s total post-1986 overseas earnings and profits based on a rate of 15.5% for the Company’s cash and cash equivalents and a rate of 8% for its other assets. The Company previously booked a provisional charge of $1.4 million related to the transition tax for all of its foreign subsidiaries, resulting in an increase in income tax expense of approximately $1.4 million for the year ended March 31, 2018. The income tax payable attributable to the transition tax is due over an 8-year period beginning in 2018. The Company revised its estimate of the impact of the transition tax, which resulted in a total of $1,892,000 in transition tax due.

Under GAAP, companies are allowed to make an accounting policy election to either treat taxes resulting from GILTI using the period cost method or the deferred method. The Company has selected the period cost method as its accounting policy with respect to the new GILTI tax rules, and therefore considered the taxes resulting from GILTI as a current-period expense for the six-month period ended September 2018. See Note 2 for additional discussion on GILTI policy election.

The Company booked $1,463,000 and $0 in income tax expense for the quarters ended September 30, 2018 and 2017, respectively, and $1,829,000 and $0 in income tax expense for the six months ended September 30, 2018 and 2017, respectively.

The Tax Act has significant complexity and our final tax liability may materially differ from provisional estimates due to additional guidance and regulations that may be issued by the U.S. Treasury Department, the Internal Revenue Service and state and local tax authorities, and for the Company’s finalization of the relevant calculations required by the new tax legislation.