INCOME TAXES

12 Months Ended

Dec. 31, 2023

INCOME TAXES

INCOME TAXES

6. INCOME TAXES

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

	December 31,
	2023			2022
Federal:
Current	$	467		$	(63	)
Deferred		(275	)		212
		192			149
State:
Current		495			78
Deferred		(159	)		(82	)
		336			(4	)
Income tax expense	$	528		$	145

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,
	2023					2022
Income taxes at statutory rate	$	278		21.0	%	$	199		21.0	%
Increase (decrease) in taxes resulting from:
State income taxes, net of federal benefit		32		2.4	%		(22	)	(2.3	)%
Stock compensation		(2	)	(0.1	)%		(11	)	(1.2	)%
Provision-to-return		240		18.2	%		(2	)	(0.2	)%
Other		(20	)	(1.5	)%		(19	)	(1.9	)%
Income tax expense	$	528		40.0	%	$	145		15.4	%

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

	December 31,
	2023			2022
Deferred tax assets:
Net operating loss carryforwards	$	213		$	319
Allowance for credit losses and doubtful accounts		195			180
Accrued vacation		70			59
Deferred revenue		1,509			768
Equity Compensation		135
Right-of-use asset		11			28
Other		151			118
Gross deferred tax assets		2,284			1,472
Deferred tax liabilities:
Retainage		(299	)		(240	)
Fixed assets		(3,422	)		(3,195	)
Prepaid expenses		(188	)		(76	)
Amortization - intangibles		(15	)		(14	)
Realized gain loss		—			(4	)
Lease liability		(11	)		(28	)
Gross deferred tax liabilities		(3,935	)		(3,557	)
Net deferred tax liability	$	(1,651	)	$	(2,085	)

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, 2023 and 2022, the Company had approximately $5,061 and $4,217 (in thousands), 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.