Income Taxes

12 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

13. Income Taxes

The following are the components of income taxes (benefit) (in thousands):

Fiscal years ended June 30,	2022			2021
Current
Federal	$	1,510		$	(186	)
State		269			97
		1,779			(89	)
Deferred
Federal		(118	)		1,402
State		(46	)		191
		(164	)		1,593
	$	1,615		$	1,504

63

EVI Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

 

The reconciliation of income tax expense computed at the federal statutory tax rate of 21% for the fiscal years ended June 30, 2022 and 2021 to the provision for income taxes is as follows (in thousands):

Fiscal years ended June 30,	2022			2021
Tax at the statutory rate	$	1,198		$	2,076
State income taxes, net of federal benefit		143			265
Nondeductible compensation		251			348
PPP Loan forgiveness		-			(1,462	)
Other		23			277
	$	1,615		$	1,504
Effective tax rate		28.3	%		15.2	%

Deferred income taxes reflect the net tax effect of temporary differences between the basis of assets and liabilities for financial reporting purposes and the basis used for income tax purposes. Significant components of the Company’s current and noncurrent deferred tax assets and liabilities as of June 30, 2022 and 2021 were as follows (in thousands):

Fiscal years ended June 30,	2022		2021
Deferred tax assets:
Allowance for doubtful accounts	$	298	$	182
Inventory capitalization		711		353
Stock compensation		697		557
Accrued liabilities		978		605
Other		58		69
		2,742		1,766

Deferred tax liabilities:
Goodwill		(3,850	)		(2,974	)
Depreciation		(1,855	)		(1,533	)
Intangible assets		(1,544	)		(1,268	)
Other		(159	)		(199	)
		(7,408	)		(5,974	)
Net deferred income tax (liabilities) assets	$	(4,666	)	$	(4,208	)

As of June 30, 2022, the Company was subject to potential federal and state tax examinations for the tax years including and subsequent to 2017.