Income Taxes

12 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 8. Income Taxes

The Federal and State filings remain subject to examination by tax authorities for tax periods ending after September 30, 2018.

The income tax provision for the years ended September 30, 2024 and 2023 consists of the following:

(in thousands)	Years Ended September 30,
	2024		2023
Current:
Federal income tax	$	99	$	(18)
State income tax	34		(2)
Total current	133		(20)
Deferred:
Federal income tax	2,260		630
State income tax	616		330
Valuation allowance	1,588		(139)
Total deferred	4,464		821
Income tax provision	$	4,597	$	801

Income tax provision attributable to income before income taxes differed from the amount computed by applying the statutory federal income tax rate of 21% to income before income taxes for each of the years ended September 30, 2024 and September 30, 2023, respectively, as a result of the following:

(in thousands)	Years Ended September 30,
	2024				2023
	Amount		Tax Rate		Amount		Tax Rate
Income tax at the statutory federal rate	$	2,300	21.0	%	$	516	21.0	%
Increase (decrease) resulting from:
State income taxes, net of federal benefit	514		4.7	%	265		10.8	%
Permanent reconciling items, net	13		0.1	%	16		0.7	%
Officer life insurance	(16)		(0.1	%)	11		0.4	%
Non-Controlling Interest - Citree	130		1.2	%	37		1.5	%
Valuation allowance	1,588		14.5	%	(139)		(5.7	%)
Other	68		0.6	%	95		3.9	%
Income tax provision	$	4,597	42.0	%	$	801	32.6	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of September 30, 2024, and 2023 are presented below:

(in thousands)	September 30,
	2024		2023
Deferred tax assets:
Goodwill	$	8,986	$	10,836
Inventories	194		1,307
Stock compensation	190		279
Accrued bonus	145		29
Intangibles	288		345
Charitable contribution carryforward	5,800		5,809
Net operating loss	4,576		3,762
Interest expense limitation	1,605		1,599
Other	115		129
Total deferred tax assets	21,899		24,095
Deferred tax liabilities:
Property and equipment	55,954		55,163
Investment in Citree	846		943
Prepaid insurance	215		229
Total deferred tax liabilities	57,015		56,335
Valuation allowance	5,757		4,170
Net deferred income tax liabilities	$	(40,873)	$	(36,410)

The Company has a federal net operating loss carryforward of $20,013 and state net operating loss carryforward of $8,321 at September 30, 2024, which resulted in deferred tax assets of $4,203 and $372, respectively. Both the federal and state net operating losses have an indefinite life.

The Company has a partial valuation allowance on our charitable contribution carryforward as of September 30, 2024 and 2023. The valuation allowance at September 30, 2024 and 2023 was $5,757 and $4,170, respectively.