XML 44 R17.htm IDEA: XBRL DOCUMENT v3.2.0.727
Income Taxes
6 Months Ended
Jun. 30, 2015
Income Taxes [Abstract]  
Income Taxes
Note 11
Income Taxes:
The Company's tax expense includes federal, state and foreign income taxes at statutory rates and the effects of various permanent differences.
The application of the rules of ASC 740-270, Interim Reporting (of taxes), to the results of continuing operations (losses) for the three month and six month period ended June 30, 2015 and the discontinued operations resulting from the XTRAC sale in June 2015 (net gain), result in an allocation of US federal and state tax expense and UK tax expense to the discontinued operations. The three month and six month losses from continuing operations in the US and the UK, which otherwise would not show a tax benefit (a 100% valuation allowance would apply against such tax benefits), report a tax benefit in the second quarter limited to the amount of the tax expense reported on the profit / gain from discontinuing operations. This reporting is covered by an exception to the normal rules under ASC 740-270, Interim Reporting.
The difference between the Company's effective tax rates for the three and six month periods ended June 30, 2015 and the U.S. Federal statutory rate (34%) is primarily the result of two factors. The tax benefits in the US and UK are computed under the statutory rates of 36.8% (federal and state) and 20% respectively but them limited as explained above. Tax expense in Israel is computed using an effective rate of 15.6% (statutory rate of 26.5% impacted by permanent differences primarily related to forex matters).  During the three and six months ended June 30, 2015, the Company recorded a tax benefit from continuing operations of $3,941 and $3,577, respectively, which is offset by tax expense on the sale of discontinued operations of $3,954.
 
During the three and six months ended June 30, 2015, the Company had no material changes to liabilities for uncertain tax positions. The Company is currently under examination for its 2012 United States federal return and various states. At this time, the Company does not believe that the results of these examinations will have a material impact on its financial statements.