11. INCOME TAXES

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

11. INCOME TAXES

The following summarizes the income tax expense (benefit) and effective tax rates:

	Three Months Ended
	March 31,
	2016			2015
Consolidated net income (loss) before income taxes	$	(4,206,019	)	$	(5,977,574	)
Income tax expense (benefit)		(532,933	)		(2,294,582	)
Effective tax rate		12.7	%		38.4	%

The differences between the U.S. federal statutory rate of 34% and the Company’s effective tax rates for the three months ended March 31, 2016 and 2015 are due primarily to state taxes and nondeductible expenses.  In addition, March 31, 2016 was impacted by the expected valuation allowance on our deferred tax asset at year-end, which affected our expected annual effective tax rate and the tax effect of nondeductible stock compensation.

The Company knows of no uncertain tax positions and has no unrecognized tax benefits for the three months ended March 31, 2016 or March 31, 2015.  When the Company believes that it is more likely than not that a net operating loss or credit may expire unused, it establishes a valuation allowance against that loss or credit.  As of March 31, 2016, the Company anticipates that it will have a net deferred tax asset at year-end 2016, for which a valuation allowance will be required.  The Company has considered the effect of the valuation allowance in the current period in determining its expected annual effective tax rate to record tax expense for the period ending March 31, 2016.  No valuation allowance was established as of March 31, 2016 or March 31, 2015.