Note 8. Income Taxes

The income tax benefit (provision) are as follows for the year ended June 30, 2024:

		Current		Deferred			Total
2024:
U.S. federal	$	-	$	-		$	-
State and local		11,543		(11,543	)		-
	$	11,543	$	(11,543	)	$	-

For the year ended June 30, 2023, there was no U.S. federal, state, or local income tax benefit (provision).

The components of the Company's income tax benefit are as follows for the years ended June 30:

		2024			2023
Expected tax benefit	$	566,521		$	1,044,407
State taxes, net of federal tax benefit		97,884			156,392
Valuation allowance		(664,480	)		(1,173,848	)
Incentive stock options		1,657			(22,330	)
Other, net		(1,582	)		(4,621	)
	$	-		$	-

The Company's deferred income tax assets and (liabilities) related to the tax effects of temporary differences are as follows as of June 30:

		2024			2023
Net deferred income tax assets (liabilities):
Inventory capitalization for income tax purposes	$	28,642		$	43,155
Inventory reserve		145,227			120,153
Accrued employee benefit reserve		40,164			43,088
Warranty reserve		29,720			28,016
Interest expense limitation		339,509			233,416
Allowance for credit losses and other		35,918			85,351
Property and equipment, principally due to differences in depreciation		108,025			27,883
Research and development credit carryover		574,022			574,022
Deferred gain on sale lease-back		191,436			224,777
Operating loss carry forwards		5,388,117			4,719,831
Valuation allowance		(6,884,228	)		(6,104,053	)
Capitalized research and development		3,448			4,361
Total deferred income tax assets (liabilities)	$	-		$	-

Quarterly, the Company assesses the likelihood by jurisdiction that its net deferred income tax assets will be recovered. Based on the weight of all available evidence, both positive and negative, the Company records a valuation allowance against deferred income tax assets when it is more-likely-than-not that a future tax benefit will not be realized. When there is a change in judgment concerning the recovery of deferred income tax assets in future periods, a valuation allowance is recorded into earnings during the quarter in which the change in judgment occurred. As of June 30, 2024 and 2023, the Company has established a full valuation allowance.

As of June 30, 2024, the Company had federal and state operating loss carryforwards of $21.7 million and $10.5 million, respectively. The federal net operating loss carryforwards have carryforward periods that are indefinite or begin to expire in 2037. The state net operating loss carryforwards have carryforward periods that are indefinite or have various expirations. The Company has no uncertain tax positions as of June 30, 2024.