INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

The income tax provision (benefit), in thousands, consists of the following for the years ended December 31, 2016 and 2015:

A reconciliation of income taxes at the statutory rate to the reported provision (benefit), in thousands, is as follows:


	2016			2015
Federal income tax at statutory rate	$	(1,071	)	$	(595	)
State and local income taxes, net of federal income tax effect	(48		)	(77		)
Permanent differences	902			—
Increase in deferred tax asset valuation allowance	408			716
Other differences	(111		)	(31		)
	$	80		$	13

Significant components of the Company’s deferred tax liabilities and assets, in thousands, as of December 31, 2016 and 2015 are as follows:


	2016			2015
Deferred tax liabilities
Property and equipment	$	(935	)	$	(1,459	)
Gross deferred tax liabilities	(935		)	(1,459		)
Deferred tax assets
Intangibles and goodwill	2,038			2,286
Accrued property taxes	53			13
Allowance for doubtful accounts	14			14
Inventory capitalization	110			63
Stock options	605			1,147
Federal net operating loss carry forward	4,706			4,176
State net operating loss carry forward	1,658			1,758
State recycling equipment tax credit carry forward	4,593			4,598
Inventory valuation reserve	60			78
Accrued expenses	187			77
Other	11			11
Gross deferred tax assets	14,035			14,221
Valuation allowance	(13,073		)	(12,665		)
Net deferred tax assets	$	27		$	97

The recorded valuation allowance, in thousands, consisted of the following at December 31, 2016 and 2015:


	Year Ended December 31,
	2016		2015
Valuation allowance, beginning of year	$	12,665	$	11,949
Increase in deferred tax asset valuation allowance	408		716
Valuation allowance, end of year	$	13,073	$	12,665