Note

- Federal, State and Local Income Taxes:

In accordance with the requirements of the Income Tax Topic of the FASB's ASC, the Company's provision for income taxes includes the following:

	Three Months Ended October 31,					Six Months Ended October 31,
($ in thousands)	2019			2018		2019			2018
Current tax expense:
Federal	$	1,143		$	871	$	2,133		$	1,605
State and local		319			72		615			160
Current tax expense		1,462			943		2,748			1,765
Deferred tax expense (benefit):
Federal		(38	)		5		(54	)		5
State and local		195			17		272			(254	)
Deferred tax expense (benefit):		157			22		218			(249	)
Income tax provision	$	1,619		$	965	$	2,966		$	1,516

On December 22, 2017 H.R. 1, originally known as the Tax Cuts and Jobs Act (the "Tax Act"), was enacted. The Tax Act lowered the U.S. federal income tax rate ("Federal Tax Rate") from 35% to 21% effective January 1, 2018. Accordingly, the Company computes Federal income tax expense using the Federal Tax Rate of 21% in fiscal year 2020 and each year thereafter.

The overall effective income tax rates, as a percentage of pre-tax ordinary income for the six months ended October 31, 2019 and October 31, 2018 were 27.29% and 19.14%, respectively. The increase in the effective tax rate during the quarter ended October 31, 2019 is primarily a result of an increase in the state and local income taxes as a result of changes in state and local tax legislation and the effect of the lowering of NYC tax allocation factor on deferred taxes in fiscal 2019. The Company's annualized overall effective tax rate fluctuates due to a number of factors, in addition to changes in tax law, including but not limited to an increase or decrease in the ratio of items that do not have tax consequences to pre-tax income, the Company's geographic profit mix between tax jurisdictions, taxation method adopted by each locality, new interpretations of existing tax laws and rulings and settlements with tax authorities.

Deferred income taxes, a liability, are provided for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. The tax effect of temporary differences giving rise to the Company's long-term deferred tax liability are as follows:

	October 31,			April 30,
($ in thousands)	2019			2019
Federal tax liability (benefit):
Deferred gain on deconsolidation of EAM	$	10,669		$	10,669
Deferred non-cash post-employment compensation		(372	)		(372	)
Depreciation and amortization		115			130
Unrealized gain on securities held for sale		542			446
Deferred charges		(341	)		(354	)
Other		(347	)		(279	)
Total federal tax liability		10,266			10,240

State and local tax liabilities (benefits):
Deferred gain on deconsolidation of EAM		2,814			2,530
Deferred non-cash post-employment compensation		(98	)		(74	)
Depreciation and amortization		28			40
Other		(88	)		(112	)
Total state and local tax liabilities		2,656			2,384
Deferred tax liability, long-term	$	12,922		$	12,624

At the end of each interim reporting period, the Company estimates the effective income tax rate to apply for the full fiscal year. The Company uses the effective income tax rate determined to provide for income taxes on a year-to-date basis and reflects the tax effect of any tax law changes and certain other discrete events in the period in which they occur.

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory income tax rate to pretax income as a result of the following:

	Six Months Ended October 31,
	2019			2018
U.S. statutory federal tax rate		21.00	%		21.00	%
Increase (decrease) in tax rate from:
State and local income taxes, net of federal income tax benefit		6.45	%		(1.62	)%
Effect of dividends received deductions		(0.20	)%		(0.24	)%
Other, net		0.04	%		0	%
Effective income tax rate		27.29	%		19.14	%

The Company believes that, as of

October 31, 2019,

there were

material uncertain tax positions that would require disclosure under GAAP.

The Company is included in the consolidated federal income tax return of the Parent. The Company has a tax sharing agreement which requires it to make tax payments to the Parent equal to the Company's liability/(benefit) as if it filed a separate return. Beginning with the fiscal year ended

April 30, 2017,

the Company files combined income tax returns with the Parent on a unitary basis in certain states as a result of changes in state tax regulations. The Company does

not

anticipate any significant tax implications from the change to unitary state tax filing.

The Company’s federal income tax returns (included in the Parent’s consolidated returns) and state and city tax returns for fiscal years ended

2016

through

2018,

are subject to examination by the tax authorities, generally for

three

years after they are filed with the tax authorities. The Company is presently engaged in a federal tax audit for the fiscal year ended

April 30, 2015

and does

not

expect it to have a material effect on the financial statements.