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Tax Provision

6 Months Ended

Mar. 31, 2014

Note 6. Tax Provision

The Company’s tax provision for the three and six months ended March 31, 2014 and 2013 is as follows:

	Three months ended March 31,				Six months ended March 31,
	2014		2013		2014		2013
Current federal tax expense		-	$	28,850		-	$	28,850
Current state tax expense	$	5,000		10,000	$	15,000		20,000
Current tax expense on international operations		19,592		10,078		38,875		52,583
Deferred tax expense		36,433		211,517		136,842		683,316
Tax provision	$	61,025	$	260,445	$	190,717	$	784,749

The deferred tax expense was primarily due to the utilization of net operating losses and the utilization of deferred timing differences related to its United States subsidiary. The Effective Tax Rate for the quarter is different than the statutory rate of 34% due to the royalty income charged from the U.S. Entity to the International Entities.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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