Income Taxes

12 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

10. Income Taxes The following are the components of income taxes provision (benefit) (in thousands):

Fiscal years ended June 30,	2024		2023
Current
Federal	$	2,195	$	3,137
State		568		786
		2,763		3,923

Fiscal years ended June 30,	2024			2023
Deferred
Federal		516			220
State		(41	)		137
		475			357
	$	3,238		$	4,280

The reconciliation of income tax expense computed at the federal statutory tax rate of 21% for the fiscal years ended June 30, 2024 and 2023 to the provision for income taxes is as follows (in thousands):

Fiscal years ended June 30,	2024			2023
Tax at the statutory rate	$	1,866		$	2,940
State income taxes, net of federal benefit		422			747
Nondeductible compensation		885			558
Other		65			35
	$	3,238		$	4,280
Effective tax rate		36.4	%		30.6	%

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, 2024 and 2023 were as follows (in thousands):

As of June 30,	2024			2023
Deferred tax assets:
Allowance for doubtful accounts	$	281		$	418
Inventory capitalization		966			1,074
Stock compensation		1,039			1,013
Accrued liabilities		1,581			1,073
Other		163			116
		4,030			3,694
Deferred tax liabilities:
Goodwill		(5,755	)		(4,946	)
Depreciation		(2,228	)		(2,104	)
Intangible assets		(1,348	)		(1,472	)
Other		(197	)		(195	)
		(9,528	)		(8,717	)
Net deferred income tax (liabilities) assets	$	(5,498	)	$	(5,023	)

As of June 30, 2024, the Company was subject to potential federal and state tax examinations for the tax years including and subsequent to 2019.