INCOME TAXES

Income tax expense (benefit) is comprised of the following:



	December 31,
	2016		2015
Federal:
Current	$	777,000	$	394,000
Deferred	514,000		14,000
	1,291,000		408,000
State:
Current	108,000		147,000
Deferred	63,000		2,000
	171,000		149,000

	$	1,462,000	$	557,000

The provision for income taxes differs from the amount determined by applying the federal statutory tax rate to pre-tax income as a result of the following:



	December 31,
	2016					2015
Income taxes at statutory rate	$	1,461,000		34.0	%	$	543,000		34.0	%
Increase (decrease) in taxes resulting from:
State income taxes, net of federal benefit	134,000			2.7	%	41,000			2.6	%
Domestic production activities deduction	(77,000		)	(1.6	)%	—			—	%
Stock compensation deferred tax asset write-off	25,000			0.5	%	—			—	%
Other	(81,000		)	(1.6	)%	(27,000		)	(1.7	)%

	$	1,462,000		34.0	%	$	557,000		34.9	%

Deferred tax assets (liabilities) are as follows:



	December 31,
	2016			2015
Depreciation	$	(1,404,000	)	$	(855,000	)
Unrealized losses on investments available for sale	15,000			6,000
Allowance for doubtful accounts	128,000			147,000
Vacation accrued	106,000			105,000
Deferred income	281,000			302,000
State NOL carryforward	75,000			43,000
Other	35,000			62,000

Net deferred tax liability	(764,000		)	(190,000		)

Current portion, net	640,000			665,000
Long-term portion, net	(1,404,000		)	(855,000		)

	$	(764,000	)	$	(190,000	)