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Income Taxes
 12 Months Ended
Apr. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax expense from continuing operations consisted of the following: 
 Years ended April 30,
 202420232022
 (in thousands)
Current:
Federal$5,539 $5,113 $983 
State2,243 1,232 401 
7,782 6,345 1,384 
Deferred:
Federal(4,362)(3,678)(685)
State(1,531)(429)(137)
(5,893)(4,107)(822)
$1,889 $2,238 $562 

The Company’s actual income tax expense differs from the “expected” income tax expense calculated by applying the Federal statutory rate of 21.0% for fiscal 2024, 2023 and 2022, to earnings from continuing operations before income taxes as follows:
 Years ended April 30,
 202420232022
 (in thousands)
Computed “expected” income tax expense$2,433 $2,566 $2,570 
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal income tax effect747 503 231 
Change in valuation allowance334 181 111 
Research and development credits(880)(586)(522)
Dividends received deduction(209)(123)(37)
Excess tax benefits from stock option deductions— (70)(1,727)
Foreign tax credits(183)(37)(44)
Other, net, including permanent items(353)(196)(20)
$1,889 $2,238 $562 
Our effective income tax rates were 16.3%, 18.3% and 4.6%, in fiscal 2024, 2023 and 2022, respectively. Our effective income tax rate takes into account the source of taxable income, by state and available income tax credits. The provision for income taxes in fiscal 2024, 2023 and 2022, includes approximately $0, $83,000 and $2,067,000, respectively, in income tax benefits related to the tax benefits realized from stock option deductions.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at April 30, 2024 and 2023 are presented as follows:
20242023
 (in thousands)
Deferred tax assets:
Accruals and expenses not deducted for tax purposes$185 $221 
IRS Section 174 costs6,341 3,651 
State net operating loss carryforwards1 13 
Fixed asset basis differences— 516 
Nonqualified stock options4,121 2,664 
Foreign net operating loss carryforwards4,886 2,860 
Right of use liability12 117 
Tax credit carryforwards83 83 
Total gross deferred tax assets15,629 10,125 
Less valuation allowance(3,914)(2,861)
Net deferred tax11,715 7,264 
Deferred tax liabilities:
Capitalized computer software development costs(3)(96)
Net gains/losses on trading securities(40)(2,160)
Goodwill and intangible assets basis differences(4,363)(1,705)
Right of use asset(11)(108)
Fixed asset basis differences(170)— 
Deferred agent commissions(918)(900)
Total gross deferred tax liabilities(5,505)(4,969)
Net deferred tax assets$6,210 $2,295 
At April 30, 2024, the Company had approximately $42,000 of various state net operating loss carryforwards which are available to offset future state taxable income, if any, through 2039. The Company has foreign branch operations in the United Kingdom and New Zealand. These branches have incurred losses since inception dating back to 2003. The losses have been utilized in the US federal jurisdiction, but have not been utilized in the respective jurisdictions. In addition, the Company has foreign operations in Australia, Belgium, India and Germany, which also have incurred losses since inception. At April 30, 2024, the Company had approximately $19.0 million of net operating loss carryforwards in these foreign jurisdictions, which are available to offset future taxable income. As a result, the Company has recorded a deferred tax asset of $4.9 million related to these losses. Furthermore, the Company does not believe it will realize the benefit of the foreign net operating loss carryforwards in the United Kingdom, New Zealand, Australia, India and Germany and therefore, has established a full valuation allowance against the deferred tax asset associated with these locations.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon reversal of deferred tax liabilities and expected future profitability, management believes it is more likely than not the Company will realize the benefits of these deductible differences, net of the existing valuation allowances at April 30, 2024.

The Company applies the accounting provisions which require us to prescribe a recognition threshold and measurement attribution for the financial statement recognition and measurement of a tax position taken or expected to be taken within an
income tax return. The Company’s recorded unrecognized tax benefits, inclusive of interest and penalties, was immaterial for each of the years ended April 30, 2024, 2023 and 2022.

We recognize potential accrued interest and penalties related to unrecognized tax benefits within income tax expense. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision. The Company’s liability for potential penalties and interest related to uncertain tax positions was immaterial at April 30, 2024 and 2023.

We conduct business globally and, as a result, file consolidated income tax returns in the United States Federal jurisdiction and in many state and foreign jurisdictions. We are no longer subject to state and local, or non-U.S. income tax examinations for years prior to 2005. We are no longer subject to U.S. Federal income tax examination for years prior to 2019.
During the years ended April 30, 2024, 2023 and 2022 we recorded research and development state tax credits against payroll taxes of approximately $458,000, $470,000 and $561,000, respectively, which reduced general and administrative expenses by the same amount.