Income taxes

12 Months Ended

Dec. 31, 2022

Income taxes

Income taxes

11. Income taxes

The components of income before income taxes for the years ended December 31, 2022 and 2021 are as follows:

	Year Ended December 31,
	2022		2021
Foreign (not subject to income taxes)	$	6,958,583	$	5,780,692
Mexico		(987,279)		(1,767,915)
United States		1,394,642		(2,952,265)
		7,365,946		1,060,512
Less discontinued operations		2,371,049		2,574,079
	$	9,736,995	$	3,634,591

The Company’s provision (benefit) for income taxes for the years ended December 31, 2022 and 2021, which related to U.S. operations, consists of the following:

	Year Ended December 31,
	2022		2021
Current:
Federal	$	430,116	$	202,444
State		(29,157)		(895)
Foreign		—		—
Total		400,959		201,549
Deferred:
Federal		(184,469)		(524,733)
State		180,249		(124,798)
Foreign		—		—
Total		(4,220)		(649,531)
Total provision (benefit)	$	396,739	$	(447,982)

A reconciliation of the U.S. statutory federal tax rate to the effective rate for the years ended December 31, 2022 and 2021 is as follows:

	Year Ended December 31,
	2022		2021
U.S. statutory federal rate	21.00	%	21.00	%
State taxes, net of federal effect	8.88	%	2.72	%
Nontaxable foreign income	(25.57)	%	(43.36)	%
Research & development tax credit	(1.92)	%	(7.39)	%
Permanent items	(0.70)	%	(6.26)	%
Goodwill impairment	—	%	20.31	%
Valuation allowance for deferred tax assets	2.38	%	0.65	%
	4.07	%	(12.33)	%

The tax effects of significant items comprising the Company’s net long-term deferred tax liability as of December 31, 2022 and 2021 were as follows:

	December 31,
	2022		2021
Continuing Operations
Deferred tax assets:
Research & development tax credits	$	58,069	$	398,413
Loss carryforward		443,076		300,545
Accrued compensation		82,503		112,446
Operating lease liabilities		412,840		469,398
Valuation allowances		(29,036)		(139,207)
		967,452		1,141,595
Deferred tax liabilities:
Property and equipment		293,195		254,301
Intangible assets		821,723		982,422
Operating lease right-of-use assets		412,840		469,398
		1,527,758		1,706,121
Net deferred tax liability	$	560,306	$	564,526
Discontinued Operations
Deferred tax assets:
Operating loss carryforwards - Mexico	$	5,378,177	$	4,230,398
Land basis difference - Mexico		2,163,681		1,602,470
Start-up costs - Mexico		4,274,858		4,693,395
Valuation allowances		(11,816,716)		(10,526,263)
	$	—	$	—

As of December 31, 2022, continuing operations has a federal net loss carryforward of $1.7 million and a state net loss carryforward of $1.6 million, both of which have an indefinite expiration date. Discontinued operations has a net loss carryforward of $17.9 million that will begin to expire, if unused, in various amounts between 2023 and 2032. The unused research & development tax credit carryforwards from continuing operations of $58,069 as of December 31, 2022 have an indefinite expiration date.