INCOME TAXES

12 Months Ended

Sep. 30, 2022

INCOME TAXES

INCOME TAXES

8. INCOME TAXES:

The components of income tax expense from operations for fiscal 2022 and fiscal 2021 consisted of the following:

	2022		2021
Current: Federal	$	4,437,197	$	3,631,619
Current: State		1,238,823		1,144,728
		5,676,020		4,776,347
Deferred: Federal		677,357		(233,907)
Deferred: State		120,003		(41,440)
		797,360		(275,347)
Income tax expense	$	6,473,380	$	4,501,000

The difference between the Company’s income tax expense in the accompanying consolidated financial statements and that which would be calculated using the statutory income tax rate of 21% for both fiscal 2022 and fiscal 2021 on income before income taxes is as follows:

	2022		2021
Tax at statutory rate	$	4,509,855	$	3,504,540
Nondeductible business expenses		1,333,491		232,684
State income taxes, net of federal tax benefit		1,072,735		867,567
Tax attributable to non-controlling interest		(298,305)		—
Other		(144,396)		(103,791)
	$	6,473,380	$	4,501,000

Temporary differences between the financial statement carrying balances and tax basis of assets and liabilities giving rise to net deferred tax assets (liabilities) at September 2022 and September 2021 relates to the following:

	2022		2021
Deferred tax assets:
Allowance for doubtful accounts	$	281,927	$	223,094
Accrued expenses		1,090,219		1,369,467
Inventory		414,239		362,466
Other		163,399		114,206
Net operating loss carry forwards - federal		—		7,108
Net operating loss carry forwards - state		697,013		697,013
Total gross deferred tax assets		2,646,797		2,773,354
Less: Valuation allowance		(697,013)		(697,013)
Total net deferred tax assets		1,949,784		2,076,341
Deferred tax liabilities:
Trade discounts		418,660		356,901
Operating lease, right-of-use assets		91,954		—
Property and equipment		2,337,447		2,101,463
Goodwill		921,799		921,799
Other		412,221		187,164
Intangible assets		96,291		40,242
Total deferred tax liabilities		4,278,372		3,607,569
Total net deferred income tax liability	$	2,328,588	$	1,531,228

The Company had a valuation allowance of approximately $0.7 million at both September 2022 and September 2021, against certain state net operating losses, which more likely than not will not be utilized. The Company had no material unrecognized tax benefits, interest, or penalties during fiscal 2022 or fiscal 2021, and the Company does not anticipate any such items during the next twelve months. The Company’s policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Operations. The Company files income tax returns in the U.S. and various states and the tax years 2019 and forward remain open under U.S. and state statutes.