Income Taxes

12 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 7 – Income Taxes

The provision for income taxes is as follows:

	2015		2014
Current:
Federal	$	584,500	$	450,000
State		161,500		131,100
		746,000		581,100
Deferred:
Federal		(4,900)		13,100
State		4,000		1,600
	$	745,100	$	595,800

The deferred tax assets (liabilities) are comprised of the following:

	2015				2014
	Current		Long-Term		Current		Long-term
Deferred tax assets:
Federal	$	97,200	$	-	$	86,100	$	-
State		6,300		-		6,500		-
Deferred tax liabilities
Federal		-		(869,100)		-		(862,900)
State		-		(59,300)		-		(55,500)
	$	103,500	$	(928,400)	$	92,600	$	(918,400)

The deferred tax assets (liabilities) consist of the following temporary differences:

	2015		2014
Depreciation	$	(928,400)	$	(918,400)
Total gross deferred tax liabilities		(928,400)		(918,400)
Vacation accrual		30,600		31,400
Federal benefit of state taxes		72,900		61,200
Total gross deferred tax assets		103,500		92,600
	$	(824,900)	$	(825,800)

The effective income tax rate varies from the statutory federal income tax rate as follows:

	2015	2014
Statutory federal income tax rate	34.0%	34.0%
Increase (decrease):
State income taxes, net of federal benefit	5.8%	5.8%
Nondeductible variable costs of shareholder usage	3.8%	4.7%
Other miscellaneous adjustments	(0.0)%	(0.2)%
Effective Income Tax Rate	43.6%	44.3%

The Company uses the asset-liability method of computing deferred taxes in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740 (previously Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”). The difference between the effective tax rate and statutory tax rate is due primarily to the effects of the graduated tax rates, state taxes net of the federal tax benefit and nondeductible variable costs of shareholder usage.

ASC Topic 740 requires, among other things, the recognition and measurement of tax positions based on a “more likely than not” (likelihood greater than 50%) approach. As of September 30, 2015, the Company did not maintain any tax positions that did not meet the “more likely than not” threshold and, accordingly, all tax positions have been fully recorded in the provision for income taxes. It is the policy of the Company to consistently classify interest and penalties associated with income tax expense separately from the provision for income taxes. No interest or penalties associated with income taxes have been included in this calculation, or separately in the Statements of Income and Retained Earnings, and no significant increases or decreases are expected within the following twelve-month period. Although the Company does not maintain any uncertain tax positions, tax returns generally remain subject to examination by the Internal Revenue Service for fiscal years ending on or after September 30, 2012, and by the California Franchise Tax Board for fiscal years ending on or after September 30, 2011.