Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 6 - INCOME TAXES

As of June 30, 2018, the Company had utilized all net operating loss carry forwards for income tax reporting purposes that were previously available to be offset against future taxable income through 2034. The net deferred tax liability as of June 30, 2018 and December 31, 2017 was $269,000 and $251,000, respectively, and is reflected in long-term liabilities in the accompanying consolidated balance sheets.

The Company is subject to income taxes in the U.S. federal jurisdiction, various state jurisdictions and certain other jurisdictions.

Tax regulations within each jurisdiction are subject to the interpretation of the relaxed tax laws and regulations and require significant judgement to apply. The Company is not subject to U.S. federal, state and local tax examinations by tax authorities for the years 2014 and prior.

If the Company were to subsequently record an unrecognized tax benefit, associated penalties and tax related interest expense would be recorded as a component of income tax expense.

The provision (benefit) for income taxes for the six months ended June 30, 2018 and 2017 was calculated based on the estimated annual effective rate of 25.35% and 34%, respectively for both the full 2018 and 2017 calendar years.

On December 22, 2017, President Trump signed into law the legislation generally known as Tax Cut and Jobs Act of 2017. The tax law includes significant changes to the U.S. corporate tax systems including a rate reduction from 35% to 21% beginning in January of 2018, a change in the treatment of foreign earnings going forward and a deemed repatriation transition tax. In accordance with ASC 740, the impact of a change in tax law is recorded in the period of enactment. During the fourth quarter of 2017, the Company recorded a non-cash, change in its net deferred income tax balances of approximately $120,000 related to the tax rate change.

The income tax provision (benefit) for the three months ended June 30, 2018 and 2017 consists of:

	2018			2017
Current:
Federal	$	(53,000	)	$	392,000
State		(15,000	)		—
Deferred:
Federal		8,500			10,000
State		500			—
Income Tax Provision (Benefit)	$	(59,000	)	$	402,000

The income tax provision (benefit) for the six months ended June 30, 2018 and 2017 consists of:

	2018			2017
Current:
Federal	$	(74,000	)	$	392,000
State		(21,000	)		—
Deferred:
Federal		17,000			138,000
State		1,000			—
Income Tax Provision (Benefit)	$	(77,000	)	$	530,000