Income taxes

12 Months Ended

Dec. 31, 2021

Income taxes

Income taxes

11. Income taxes

The components of income before income taxes for the years ended December 31, 2021 and 2020 are as follows:

	Year Ended December 31,
	2021		2020
Foreign (not subject to income taxes)	$	5,780,692	$	6,475,693
Mexico		(1,767,915)		(4,903,988)
United States		(2,952,265)		2,956,552
		1,060,512		4,528,257
Less discontinued operations		2,574,079		4,902,243
	$	3,634,591	$	9,430,500

The Company’s provision (benefit) for income taxes for the years ended December 31, 2021 and 2020, which related to U.S. operations, consisted of the following:

	Year Ended December 31,
	2021		2020
Current:
Federal	$	202,444	$	191,322
State		(895)		87,630
Foreign		—		—
Total		201,549		278,952
Deferred:
Federal		(524,733)		(132,957)
State		(124,798)		(59,271)
Foreign		—		—
Total		(649,531)		(192,228)
Total provision (benefit)	$	(447,982)	$	86,724

A reconciliation of the U.S. statutory federal tax rate to the effective rate for the years ended December 31, 2021 and 2020 is as follows:

	Year Ended December 31,
	2021		2020
U.S. statutory federal rate	21.00	%	21.00	%
State taxes, net of federal effect	2.72	%	4.00	%
Nontaxable foreign income	(43.36)	%	(17.28)	%
Research & development tax credit	(7.39)	%	(11.73)	%
Permanent items	(6.26)	%	(0.67)	%
Goodwill impairment	20.31	%	—	%
Valuation allowance for deferred tax assets	0.65	%	5.60	%
	(12.33)	%	0.92	%

The tax effects of significant items comprising the Company’s net long-term deferred tax liability as of December 31, 2021 and 2020 were as follows:

	December 31,
	2021		2020
Continuing Operations
Deferred tax assets:
Research & development tax credits	$	398,413	$	613,003
Loss carry forward		300,545		—
Accrued compensation		112,446		110,092
Valuation allowances		(139,207)		(496,343)
		672,197		226,752
Deferred tax liabilities:
Property and equipment		254,301		252,800
Intangible assets		982,422		1,188,009
		1,236,723		1,440,809
Net deferred tax liability	$	564,526	$	1,214,057
Discontinued Operations
Deferred tax assets:
Operating loss carryforwards - Mexico	$	4,230,398	$	4,296,453
Land basis difference - Mexico		1,602,470		1,262,159
Start-up costs - Mexico		4,693,395		4,904,337
Valuation allowances		(10,526,263)		(10,462,949)
	$	—	$	—

As of December 31, 2021, continuing operations has a federal net loss carryforward of $1.2 million and a state net loss carryforward of $1.1 million, both of which have an indefinite expiration date. Discontinued operations has a net loss carryforward of $14.1 million that will begin to expire, if unused, in various amounts between 2022 and 2041.