Note 7 - Income Taxes

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Income Tax Disclosure [Text Block]

7.  Income Taxes

Deferred tax attributes resulting from differences between the tax basis of assets and liabilities and the reported amounts in the Consolidated Balance Sheets are as follows:

	December 31,			December 31,
	2024			2023
Deferred tax assets:
Accruals and reserves	$	1,563		$	574
Deferred rent credit		92			115
Depreciation and amortization		635			55
Total deferred tax assets		2,290			744
Deferred tax liabilities:
Accruals and reserves		(965	)		—
Depreciation and amortization		(5,855	)		(5,974	)
Total deferred tax liabilities		(6,820	)		(5,974	)
Net deferred tax liabilities	$	(4,530	)	$	(5,230	)

The provision for income taxes is as follows:

	Year ended December 31,
	2024			2023
Current:
Federal	$	4,610		$	2,793
State		839			676
Foreign		1,471			1,372
		6,920			4,841
Deferred:
Federal		28			32
State		112			10
Foreign		(652	)		(425	)
		(512	)		(383	)
	$	6,408		$	4,458
Effective Tax Rate		25.6	%		26.6	%

The reasons for the difference between total tax expense and the amount computed by applying the U.S. statutory federal income tax rate to income before income taxes are as follows:

	Year ended December 31,
	2024			2023
Statutory rate applied to pretax income	$	5,254		$	3,524
Other permanent items		384			569
State income taxes, net of federal income tax benefit		752			542
Acquisition related costs		760			132
Other items		56			—
Dividends		(1	)		(3	)
GILTI, net of foreign tax credits		(41	)		(11	)
Foreign income taxes (under) U.S. statutory rate		(200	)		(46	)
Stock compensation		(556	)		(249	)
Income tax expense	$	6,408		$	4,458

The Company has analyzed filing positions in all the federal, state and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has identified its federal consolidated tax return, its state tax returns, its Canadian tax return and its tax return in the United Kingdom as major tax jurisdictions. As of December 31, 2024, the Company’s 2021 through 2023 Federal tax returns remain open for examination. The Company’s various states and Canadian tax returns are open for examination for the years 2020 through 2023. The Company’s tax return in the United Kingdom is open for examination for the years 2022 and 2023. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company believes that it has appropriate support for the income tax positions it takes and expects to take on its tax returns, and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including experience and interpretations of tax law applied to the facts of each matter.

For financial reporting purposes, income before income taxes includes the following components:

	Year ended December 31,
	2024		2023
United States	$	20,961	$	11,990
Foreign		4,057		4,791
	$	25,018	$	16,781

The Company has approximately $10.2 million of undistributed earnings in Canada and $4.9 million of undistributed earnings in the United Kingdom and $0.6 million of undistributed earnings in Ireland, which it continues to reinvest indefinitely, and therefore no withholding taxes related to its repatriation has been recorded.

There was no activity related to the Company’s unrecognized tax benefits during the year ended December 31, 2024 and December 31, 2023.

During the years ended December 31, 2024 and 2023, the Company incurred interest and penalties of zero, respectively, related to these uncertain tax benefits.