. INCOME TAXES

Components of tax expense (benefit) are as follows:

	Year Ended March 31
	201 8		2017
Federal
Current	$	—	$	(714,684	)
Deferred		1,178,073		(644,865	)
		1,178,073		(1,359,549	)
State
Current		38,742		—
Deferred		91,075		(112,583	)
		129,817		(112,583	)
Total	$	1,307,890	$	(1,472,132	)

The effective tax rate for fiscal

2018

was impacted by the Tax Cuts and Jobs Act (the “Tax Act”), enacted on

December 22, 2017

by the U.S. government. The Tax Act makes broad and complex changes to the U.S. tax code, including, but

not

limited to, reducing the U.S. federal corporate tax rate and repealing the deduction for domestic production activities.

The Tax Act reduced the federal corporate tax rate applicable to the Company from

34%

21%

effective

January 1, 2018.

In accordance with Section

of the Internal Revenue Code, the Company has utilized a blended rate of approximately

30.8%

to compute federal tax expense for fiscal

2018.

The blended rate is calculated by applying prorated percentages, based on the number of days prior to and subsequent to the

January 1, 2018

effective date, to the tax rate applicable for the respective pre and post effective periods. The

21%

federal corporate tax rate will apply to fiscal years ending

March 31, 2019

and each year thereafter.

As a result of the change to the corporate tax rate, the Company was required to re-measure its net deferred tax assets and liabilities using the tax rate that will apply when those amounts are expected to reverse. The re-measurement of deferred tax assets and liabilities at the new tax rate resulted in a provisional noncash tax benefit of approximately

$77,000

due to the reduction of the Company’s net deferred tax liability position. The Company previously provided an estimated provisional tax expense of approximately

$240,500

in the Form

-Q for the quarter ended

December 31, 2017.

The change in the provisional impact is primarily due to a change in the expected depreciation related timing differences for the pipe-finishing facility placed into service during fiscal

2018.

December 22, 2017,

the Securities and Exchange Commission issued Staff Accounting Bulletin

118

(“SAB

118”

), which provides guidance on accounting for tax effects of the Tax Act. SAB

118

provides a measurement period, which should

not

extend beyond

one

year form the Tax Act enactment date, for companies to complete the accounting under Accounting Standards Codification

740

(“ASC

740”

). In accordance with SAB

118,

a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC

740

is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC

740

according to the tax laws that were in effect immediately before the enactment of the Tax Act. While the Company is able to make reasonable estimates of the impact of the Tax Act, the final impact of the Tax Act

may

differ from these estimates, due to, among other things, changes in the Company’s interpretations and assumptions, additional guidance that

may

be issued and actions the Company

may

take. The accounting is expected to be complete by the time the Company’s

2017

U.S. corporate income tax return is filed in

2018.

Future adjustments to the provisional numbers will be recorded as discrete adjustments to income tax expense in the period in which those adjustment become estimable and/or are finalized.

The U.S. federal statutory income tax rate is reconciled to the effective rate as follows:

	Year Ended March 31
	201 8			2017
Income tax expense (benefit) at U.S. federal statutory rate (1)		30.8	%		(34.0%	)
Benefit due to tax reform		(2.0	)		—
Current year state and local income taxes net of federal income tax benefit		3.4			(1.7	)
Other		—			0.2
Provision for (benefit from) income taxes		32.2	%		(35.5%	)

(

)

The statutory rate for fiscal

2018

is a blended rate due to the Tax Cuts and Jobs Act enacted by the U.S. government on

December 22, 2017.

The Company’s tax returns

may

be subject to examination by the Internal Revenue Service for the fiscal years ended

March

31,

2015

through

March

31,

2017.

State and local returns

may

be subject to examination for fiscal years ended

March

31,

2014

through

March

31,

2017.

Deferred income taxes are provided for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s consolidated deferred tax assets (liabilities) are as follows:

	March 31
	201 8			2017
Deferred tax liabilities:
Depreciation	$	(1,053,139	)	$	(507,970	)
Total deferred tax liabilities		(1,053,139	)		(507,970	)
Deferred tax assets:
Inventory capitalization		114,428			166,979
LIFO Inventory		484,016			783,645
Postretirement benefits other than pensions		36,762			187,096
Net operating loss carryforward - Federal		184,668			343,729
Net operating loss carryforward - State		21,507			112,583
Other		108,560			79,888
Total deferred tax assets		949,941			1,673,920
Net deferred tax asset (liability)	$	(103,198	)	$	1,165,950