Income taxes

12 Months Ended

Dec. 31, 2023

Income taxes

Income taxes

11. Income taxes

The components of income before income taxes for the years ended December 31, 2023 and 2022 are as follows:

	Year Ended December 31,
	2023		2022
Foreign (not subject to income taxes)	$	10,002,233	$	6,958,583
Mexico		(742,367)		(987,279)
United States		27,649,330		1,394,642
		36,909,196		7,365,946
Discontinued operations		1,086,744		2,371,049
	$	37,995,940	$	9,736,995

The Company’s provision for (benefit from) income taxes for the years ended December 31, 2023 and 2022, which related to U.S. operations, consisted of the following:

	Year Ended December 31,
	2023		2022
Current:
Federal	$	5,611,360	$	430,116
State		1,663,653		(29,157)
Foreign		—		—
Total current income tax expense (benefit)		7,275,013		400,959
Deferred:
Federal		(276,070)		(184,469)
State		(248,929)		180,249
Foreign		—		—
Total deferred income tax expense (benefit)		(524,999)		(4,220)
Total provision for (benefit from) income taxes	$	6,750,014	$	396,739

A reconciliation of the U.S. statutory federal tax rate to the effective rate for the years ended December 31, 2023 and 2022 is as follows:

	Year Ended December 31,
	2023		2022
U.S. statutory federal rate	21.00	%	21.00	%
State taxes, net of federal effect	2.88	%	8.88	%
Foreign rate differential	(5.71)	%	(25.57)	%
Research and development tax credit	—	%	(1.92)	%
Permanent items	(0.32)	%	(0.70)	%
Change in valuation allowance	(0.08)	%	2.38	%
	17.77	%	4.07	%

The tax effects of significant items comprising the Company’s net long-term deferred tax liability as of December 31, 2023 and 2022 were as follows:

	December 31,
	2023		2022
Continuing Operations
Deferred tax assets:
Research and development credit carryforwards	$	—	$	58,069
Net operating loss carryforwards		130,911		443,076
Accruals and reserves		146,057		82,503
Operating lease liabilities		501,397		412,840
Capitalized research expenditures		326,178		—
Others		29,094		—
Valuation allowances		—		(29,036)
		1,133,637		967,452
Deferred tax liabilities:
Property and equipment		325,473		293,195
Intangible assets		847,450		821,723
Operating lease right-of-use assets		491,494		412,840
		1,664,417		1,527,758
Net deferred tax liabilities	$	(530,780)	$	(560,306)
Discontinued Operations
Deferred tax assets:
Operating loss carryforwards - Mexico	$	5,844,847	$	5,378,177
Land basis difference - Mexico		2,818,663		2,163,681
Start-up costs - Mexico		7,015,484		4,274,858
Valuation allowances		(15,678,994)		(11,816,716)
	$	—	$	—

As of December 31, 2023, continuing operations has a federal net loss carryforward of $0.6 million and a state net loss carryforward of $0.3 million, both of which have an indefinite expiration date. Discontinued operations has a net loss carryforward of $19.5 million that will begin to expire, if unused, in various amounts between 2024 and 2033.