Income Taxes

12 Months Ended

Dec. 31, 2019

Note 8. Income Taxes

The provision for income tax for the years ended December 31 is as follows:

	2019			2018
Current (benefit) provision:
Federal	$	(158	)	$	392
State		(33	)		77
Total current (benefit) provision		(191	)		469
Deferred (benefit) provision:
Federal		(264	)		122
State		(58	)		28
Total deferred (benefit) provision		(322	)		150
(Benefit) provision:
Federal		(422	)		514
State		(91	)		105
Total (benefit) provision	$	(513	)	$	619

Income tax expense at the statutory tax rate is reconciled to the overall income tax expense for the years ended December 31 as follows:

	2019			2018
Federal income tax at statutory rates	$	(246	)	$	598
State income taxes, net of federal tax effect		(38	)		83
Permanent differences		3			7
Nondeductible stock-based compensation		13			30
Impact of change in federal tax rate		-			(56	)
Foreign-derived intangible income deduction		(183	)		(40	)
Other		(62	)		(3	)
(Benefit) provision for income taxes	$	(513	)	$	619

ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is "more likely than not." Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carryforward period.The net deferred tax assets and liabilities as of December 31, 2019 and 2018 are comprised of the following:

	2019			2018
Deferred tax assets:
Net operating loss carryforwards	$	156		$	-
Accounts receivable		168			171
Inventories		124			66
Accrued vacation and bonus		38			36
Intangibles and Goodwill		112			89
Operating lease liabilities		53			-
Other		40			21
Total deferred tax assets		691			383
Deferred tax liabilities:
Operating lease right-of-use assets		(46	)		-
Accumulated depreciation for tax purposes		(89	)		(149	)
Total deferred tax liabilities		(135	)		(149	)
Net deferred tax asset	$	556		$	234

Net operating losses and tax credit carryforwards as of December 31, 2019 are as follows:

			Expiration Years
Net operating losses, federal (After December 31, 2017)	$	632	Do not expire
Net operating losses, state (After December 31, 2017)		629	Do not expire
Tax credits, federal		14	2040

Accounting for uncertainty in income taxes is based on a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We recognize in our consolidated financial statements only those tax positions that are more-likely-than-not to be sustained as of the adoption date, based on the technical merits of the position. Each year we perform a comprehensive review of our material tax positions.

Our policy is to recognize interest and penalties related to uncertain tax benefits in income tax expense. As we had no uncertain tax benefits during 2019 and 2018, we had no accrued interest or penalties related to uncertain tax positions in either year.

We and our subsidiaries are subject to the following material taxing jurisdictions: United States and Colorado. The tax years that remain open to examination by the Internal Revenue Service are 2016 and years thereafter. The tax years that remain open to examination by the State of Colorado are 2015 and years thereafter.