Income Taxes

12 Months Ended

Dec. 31, 2013

Income Taxes [Abstract]

Income Taxes

3.INCOME TAXES

A reconciliation between income taxes computed at the statutory federal income tax rate and the effective tax rate for the years ended December 31, 2013 and 2012 is as follows:

	2013		2012
Federal tax expense at statutory rates	$	587,367	$	668,602
Nondeductible lobbying expense		29,115		102,332
State expense, net of federal impact		128,146		155,738
Stock option expense		12,465		22,862
Other		(37,312)		578
	$	719,781	$	950,112

Income tax expense for the years ended December 31, 2013 and 2012 consists of the following:

	2013		2012
Current
Federal	$	179	$	864,576
State		156,002		250,136
		156,181		1,114,712
Deferred, primarily Federal		563,600		(164,600)
	$	719,781	$	950,112

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. 

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2013 and 2012 are as follows:

	2013		2012
Deferred tax assets
Vacation accrual	$	68,400	$	68,800
Player rewards program accrual		269,600		252,700
Stock options and stock appreciation rights		339,300		259,700
Other		-		103,600
Total deferred tax assets	$	677,300	$	684,800
Deferred tax liabilities
Tax depreciation greater than book depreciation	$	(1,961,400)	$	(1,410,000)
Deferred gain on sale of land		(104,000)		(104,000)
Other		(4,700)		-
Total deferred tax liabilities	$	(2,070,100)	$	(1,514,000)

The Company is subject to U.S. and Minnesota taxation.  The Company is no longer subject to U.S. federal, state, or local examinations by tax authorities for years before 2009.