Income Taxes (Tables)

9 Months Ended

Sep. 30, 2013

Components of income tax expense (benefit)

The components of income tax expense (benefit) are as follows:

(in thousands)	Three Months Ended						Nine Months Ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
Federal – current	$	237		$	-		$	509		$	-
State – current		429			11			969			33
Total current		666			11			1,478			33

Federal – deferred		(291	)		(182	)		(742	)		(517	)
Change in valuation allowance		291			182			742			517
Total deferred		-			-			-			-

Income tax expense (benefit)	$	666		$	11		$	1,478		$	33

The components of pretax income (loss) and the difference between income taxes computed at the statutory federal rate and the provision for income taxes are as follows:

(in thousands)	Three Months Ended						Nine Months Ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
Income (loss) before income taxes	$	(832	)	$	(520	)	$	(2,120	)	$	(1,476	)
Tax expense (benefit):
Tax at statutory federal rate	$	(291	)	$	(182	)	$	(742	)	$	(517	)
State income taxes		64			11			192			33
Federal interest		237			-			509			-
State interest		365			-			777			-
Permanent items		-			-			-			-
Accounting loss benefit not recognized		-			-			-			-
Change in valuation allowance		291			182			742			517

Income tax expense (benefit)	$	666		$	11		$	1,478		$	33

Income tax reconciliation

A reconciliation of the United States federal statutory rate to the Company's effective income tax rate is as follows:

	Three Months Ended				Nine Months Ended
	September 30, 2013		September 30, 2012		September 30, 2013		September 30, 2012
Tax at statutory federal rate	35.0	%	35.0	%	35.0	%	35.0	%
State income taxes	(7.7	)	(2.1	)	(9.0	)	(2.1	)
Federal interest	(28.4	)	-		(24.0	)	-
State interest	(43.9	)	-		(36.7	)	-
Permanent differences, tax credits and other adjustments	-		-		-		-
Accounting loss benefit not recognized	-		-		-		-
Change in valuation allowance	(35.0	)	(35.0	)	(35.0	)	(35.0	)
Effective income tax rate	(80.0	)%	(2.1	)%	(69.7	)%	(2.2	)%

Interest expense related to uncertain tax positions

The interest expense related to the uncertain tax positions is as follows:

(in thousands)	Three Months Ended				Nine Months Ended
	September 30, 2013		September 30, 2012		September 30, 2013		September 30, 2012
Federal	$	237	$	-	$	509	$	-
State jurisdictions		365		-		777		-

Interest expense - taxes	$	602	$	-	$	1,286	$	-

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

+ References+ Details