Note 12 - Income Taxes

12 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Text Block]

12.           INCOME TAXES 

The provision for income taxes is as follows: 

	Year Ended March 31,
	2013		2012
Current:
Federal	$	820,000	$	195,000
State		146,000		41,000
Foreign		69,000		105,000
Total current		1,035,000		341,000
Deferred:
Federal		21,000		347,000
State		4,000		58,000
Total deferred		25,000		405,000
Total	$	1,060,000	$	746,000

The income tax provision was different from the amount computed using the statutory Federal income tax rate for the following reasons:

	Year Ended March 31,
	2013				2012
Income tax provision at U.S. statutory rate	$	928,000	34.0	%	$	713,000		34.0	%
State income taxes, net of Federal benefit		99,000	3.6			60,000		2.9
Permanent differences, other		30,000	1.1			32,000		1.5
Other differences, net		3,000	0.1			(59,000	)	(2.8	)
Income tax provision	$	1,060,000	38.8	%	$	746,000		35.6	%

Deferred tax assets and liabilities consisted of the following as of:

	March 31,
	2013			2012
Stock option compensation	$	360,000		$	353,000
Inventory reserves		296,000			290,000
Accrued vacation		227,000			202,000
Warranty reserve		78,000			95,000
Accounts and notes receivable reserve		25,000			108,000
Other		16,000			21,000
Gross deferred tax assets		1,002,000			1,069,000
Prepaid expenses		(232,000	)		(286,000	)
Property and equipment		(429,000	)		(417,000	)
Gross deferred tax liabilities		(661,000	)		(703,000	)
Net deferred tax asset	$	341,000		$	366,000

The deferred tax items are reported on a net current and non-current basis in the accompanying fiscal 2013 and 2012 consolidated balance sheets according to the classification of the related asset and liability.

The Company accounts for uncertain tax positions in accordance with accounting principles generally accepted in the United States of America. The Company has analyzed filing positions in all of the federal, state and international jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The periods subject to examination for the Company’s federal and state returns are the fiscal 2008 through 2012 tax years. The Company was recently notified that its federal tax return for the year ended March 31, 2011 will be examined. As of March 31, 2013 and 2012, the Company did not have any unrecognized tax benefits.

It is the Company’s policy to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of March 31, 2013 and 2012, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the years ended March 31, 2013 and 2012.