Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

4. INCOME TAXES

Income tax expense is comprised of the following (in thousands):

	December 31,
	2022			2021
Federal:
Current	$	(63	)	$	1,574
Deferred		212			(382	)
		149			1,192
State:
Current		78			456
Deferred		(82	)		(124	)
		(4	)		332
	$	145		$	1,524

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 (in thousands):

	December 31,
	2022					2021
Income taxes at statutory rate	$	199		21.0	%	$	1,910		21.0	%
Increase (decrease) in taxes resulting from:
State income taxes, net of federal benefit		(22	)	(2.3	)%		267		2.9	%
Stock Compensation		(11	)	(1.2	)%		(63	)	(0.7	)%
Deferred true-ups		—		0.0	%		17		0.2	%
Provision-to-return		(2	)	(0.2	)%		5		0.1	%
CARES Act Benefit		—		—	%		(4	)	(0.1	)%
PPP Loan Forgiveness		—		—	%		(565	)	(6.2	)%
Other		(19	)	(1.9	)%		(43	)	(0.4	)%
	$	145		15.4	%	$	1,524		16.8	%

Deferred tax assets (liabilities) are as follows (in thousands):

	December 31,
	2022			2021
Deferred tax assets:
Net operating loss carryforwards	$	319		$	51
Allowance for doubtful accounts		180			109
Accrued vacation		59			61
Deferred buy-back asset		—			942
Deferred income		768			774
Right-of-use asset		28			53
Other		118			102
Gross deferred tax assets		1,472			2,092
Deferred tax liabilities:
Retainage		(240	)		(284	)
Deferred buy-back obligation		—			(846	)
Fixed assets		(3,195	)		(2,770	)
Prepaid expenses		(76	)		(72	)
Amortization - intangibles		(14	)		(16	)
Realized gain loss		(4	)		(6	)
Lease liability		(28	)		(53	)
Gross deferred tax liabilities		(3,557	)		(4,047	)
Net deferred tax liability	$	(2,085	)	$	(1,955	)

In assessing the need for a valuation allowance, management must determine that there will be sufficient taxable income to realize deferred tax assets. Based upon the historical and anticipated future positive earnings, management has determined that the deferred tax assets are realizable.

As of December 31, 2022 and 2021, the Company had approximately $2,395 and $2,361, respectively, of state net operating losses (NOLs) available to offset future state taxable income. The state NOLs begin expiring at various times between 2028 and 2037.