INCOME TAXES

12 Months Ended

Sep. 30, 2024

INCOME TAXES

INCOME TAXES

8. INCOME TAXES:

The components of income tax expense from operations for fiscal 2024 and fiscal 2023 consisted of the following:

	2024		2023
Current: Federal	$	2,998,194	$	2,324,897
Current: State		671,450		791,731
		3,669,644		3,116,628
Deferred: Federal		(461,826)		2,199,672
Deferred: State		(81,818)		389,700
		(543,644)		2,589,372
Income tax expense	$	3,126,000	$	5,706,000

The difference between the Company’s income tax expense in the accompanying consolidated financial statements and the amount that would be calculated using the statutory income tax rate of 21% for both fiscal 2024 and fiscal 2023 on income from operations before income taxes is as follows:

	2024		2023
Tax at statutory rate	$	1,567,122	$	3,633,503
Nondeductible business expenses		1,162,221		1,313,864
State income taxes, net of federal tax benefit		472,853		924,567
Tax attributable to non-controlling interest		(203,757)		(443,831)
Other		127,561		277,897
	$	3,126,000	$	5,706,000

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 2024 and September 2023 relates to the following:

	2024		2023
Deferred tax assets:
Allowance for expected credit losses	$	252,263	$	253,252
Accrued expenses		—		273,313
Inventory		559,277		533,723
Other		838,158		618,256
Interest expense limitation		1,667,806		753,451
Net operating loss carry forwards - state		697,013		697,013
Total gross deferred tax assets		4,014,517		3,129,008
Less: Valuation allowance		(697,013)		(697,013)
Total net deferred tax assets		3,317,504		2,431,995
Deferred tax liabilities:
Trade discounts		554,066		471,126
Operating lease, right-of-use assets		99,488		97,468
Property and equipment		5,834,321		5,725,493
Goodwill		921,799		921,799
Accrued expenses		117,878		—
Intangible assets		164,268		134,069
Total deferred tax liabilities		7,691,820		7,349,955
Total net deferred income tax liability	$	4,374,316	$	4,917,960

The Company had a valuation allowance of approximately $0.7 million at both September 2024 and September 2023, 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 2024 or fiscal 2023, 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 2021 and forward remain open under U.S. and state statutes.