Note 4 - Income Taxes

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

4

–

Income

Taxes

The income tax provision is comprised of the following for the years ended December 31:

	2015			2014
Current state tax expense	$	64,809		$	17,570
Current federal tax expense		320,931			3,000
Deferred state tax benefit		(19,340	)		(14,000	)
Deferred federal tax benefit		(26,452	)		(73,000	)
Income tax expense (benefit)	$	339,948		$	(66,430	)

The reconciliation between the statutory federal income tax rate and the Company’s effective tax rate is as follows:

	2015			2014
Federal statutory rate		34.0	%		34.0	%
State taxes		3.3			0.5
Nondeductible lobbying expenses		3.6			3.3
Other Nondeductible/Nontaxable Items		1.5			2.4
Change in federal valuation allowance asset		-			(54.4	)
Effective tax rate		42.4	%		(14.2	)%

During 2015, federal net operating loss carry forwards of $155,354 were utilized by the Company for purposes of the Company’s tax provision. There was no remaining federal net operating loss carry forward available at December 31, 2015. The Company had $113,071 of state net operating loss carry forwards at December 31, 2015 which begin to expire in 2023. The Company’s valuation allowance associated with the related deferred tax assets was $7,455 and $0 at December 31, 2015 and 2014, respectively.

Deferred tax assets consist of the following as of December 31:

	2015			2014
Deferred tax asset:
Fixed assets and other	$	214,548		$	95,593
Net operating loss carryforwards		7,455			58,043
Research and development & AMT credit		-			15,364
Valuation Allowance		(7,455	)		-
Net deferred tax asset	$	214,548		$	169,000

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers both positive and negative evidence in making this assessment, including the future reversal of existing temporary taxable differences, projected future taxable income, any recent expiration of unused net operating losses and tax planning strategies. In 2015, the Company determined that its ability to realize the deferred tax asset associated with its state net operating losses does not meet the more likely than not standard. As a result, the Company established a valuation allowance against this deferred tax asset.

The Company continues to analyze its income tax positions and no significant income tax uncertainties were identified in 2015 and 2014. Therefore, the Company recognized no tax contingencies or unrecognized tax positions for the years ended December 31, 2015 and 2014. The Company is not currently under examination by the Internal Revenue Service. The United States federal statute of limitations remains open for the years 2012 onward. State income tax returns are generally subject to examination for a period of three to five years after filing of the respective return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. The Company is not currently under examination in any state jurisdictions. The Company is no longer subject to federal or state income tax assessments for years prior to 2010.