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INCOME TAXES | 12 Months Ended
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Mar. 31, 2013
INCOME TAXES [Abstract] |
INCOME TAXES | 12. INCOME TAXES We account for our tax positions in accordance with Codification Topic Income Taxes. Under the guidance, we evaluate uncertain tax positions based on the two-step approach. The first step is to evaluate each uncertain tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained in an audit, including resolution of related appeals or litigation processes, if any. For tax positions that are not likely of being sustained upon audit, the second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50 percent likely of being realized upon ultimate settlement. As of March 31, 2012, we had $316 thousand of total gross unrecognized tax benefits recorded for uncertain income tax position in accordance with Income Taxes in the Codification. During the year ended March 31, 2013, we had no additions or reductions for uncertain income tax positions therefore our balance remains unchanged at $316 thousand as of March 31, 2013. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):
|  | Year Ended March 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
Beginning balance |  | $ | 316 |  |  | $ | 719 |  |  | $ | 461 |
Additions for uncertain tax positions |  |  | - |  |  |  | - |  |  |  | 403 |
Reductions to uncertain tax positions |  |  | - |  |  |  | (403 | ) |  |  | (145 | )
Ending balance |  | $ | 316 |  |  | $ | 316 |  |  | $ | 719 |
At March 31, 2013, if the unrecognized tax benefits of $316 thousand were to be recognized, including the effect of interest, penalties and federal tax benefit, the impact would have been $434 thousand. At March 31, 2012, if the unrecognized tax benefits of $316 thousand were to be recognized, including the effect of interest, penalties and federal tax benefit, the impact would have been $424 thousand. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. During the fiscal years ended March 31, 2013 and 2012, we recognized $17 thousand and $31 thousand, respectively, of interest related to uncertain tax positions, and did not recognize any additional penalties. We had $197 thousand and $180 thousand accrued for the payment of interest at March 31, 2013 and 2012, respectively. We file income tax returns, including returns for our subsidiaries, with federal, state, local, and foreign jurisdictions. Tax years 2009, 2010 and 2011 are subjected to examination by federal and state taxing authorities. Various state and local income tax returns are also under examination by taxing authorities. We do not believe that the outcome of any examination will have a material impact on our financial statements. A reconciliation of income taxes computed at the statutory federal income tax rate of 35% to the provision for income taxes included in the consolidated statements of operations is as follows (in thousands, except percentages):
|  | Year Ended March 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
Statutory federal income tax rate |  |  | 35 | % |  |  | 35 | % |  |  | 35 | %
Income tax expense computed at the U.S. statutory federal rate |  | $ | 20,555 |  |  | $ | 13,850 |  |  | $ | 14,199 |
State income tax expense—net of federal benefit |  |  | 2,894 |  |  |  | 2,096 |  |  |  | 1,861 |
Non-deductible executive compensation |  |  | 150 |  |  |  | 152 |  |  |  | 81 |
Other |  |  | 316 |  |  |  | 109 |  |  |  | 700 |
Provision for income taxes |  | $ | 23,915 |  |  | $ | 16,207 |  |  | $ | 16,841 |
Effective income tax rate |  |  | 40.7 | % |  |  | 41.0 | % |  |  | 41.5 | %
The effective income tax rate for the year ended March 31, 2013 was 40.7%, a change from 41.0% of the previous fiscal year. The change in the effective income tax rate is due to changes in state apportionment factors. The components of the provision for income taxes are as follows (in thousands):
|  | Year Ended March 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 20,041 |  |  | $ | 12,266 |  |  | $ | 10,604 |
State |  |  | 4,453 |  |  |  | 3,088 |  |  |  | 3,774 |
Foreign |  |  | 36 |  |  |  | 59 |  |  |  | 39 |
Total current expense |  |  | 24,530 |  |  |  | 15,413 |  |  |  | 14,417 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (581 | ) |  |  | 814 |  |  |  | 2,846 |
State |  |  | (34 | ) |  |  | (20 | ) |  |  | (422 | )
Total deferred expense (benefit) |  |  | (615 | ) |  |  | 794 |  |  |  | 2,424 |
Provision for income taxes |  | $ | 23,915 |  |  | $ | 16,207 |  |  | $ | 16,841 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities were as follows (in thousands):
|  | March 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
Deferred Tax Assets: |  |  |  |  |  |  |  |  |
Accrued vacation |  | $ | 1,345 |  |  | $ | 1,174 |  |  | $ | 1,174 |
Provision for bad debts |  |  | 1,997 |  |  |  | 2,149 |  |  |  | 1,024 |
State net operating loss carryforward |  |  | 1,505 |  |  |  | 1,217 |  |  |  | 1,296 |
Basis difference in fixed assets |  |  | - |  |  |  | - |  |  |  | 147 |
Book compensation on discounted stock options |  |  | 77 |  |  |  | 262 |  |  |  | 611 |
Deferred compensation |  |  | 898 |  |  |  | 797 |  |  |  | 716 |
Deferred revenue |  |  | 221 |  |  |  | 140 |  |  |  | 203 |
Foreign tax credit |  |  | - |  |  |  | - |  |  |  | 72 |
Federal net operating loss carry forward |  |  | 168 |  |  |  | 111 |  |  |  | - |
Other accruals and reserves |  |  | 2,043 |  |  |  | 1,918 |  |  |  | 1,206 |
Gross deferred tax assets |  |  | 8,254 |  |  |  | 7,768 |  |  |  | 6,449 |
Less: valuation allowance |  |  | (1,505 | ) |  |  | (1,217 | ) |  |  | (1,296 | )
Net deferred tax assets |  |  | 6,749 |  |  |  | 6,551 |  |  |  | 5,153 |
Deferred Tax Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Basis difference in fixed assets |  |  | (491 | ) |  |  | (378 | ) |  |  | - |
Basis difference in operating leases |  |  | (8,765 | ) |  |  | (9,764 | ) |  |  | (8,645 | )
Basis difference in tax deductible goodwill |  |  | (2,288 | ) |  |  | (2,195 | ) |  |  | (735 | )
Total deferred tax liabilities |  |  | (11,544 | ) |  |  | (12,337 | ) |  |  | (9,380 | )
Net deferred tax liabilities |  | $ | (4,795 | ) |  | $ | (5,786 | ) |  | $ | (4,227 | )
As of March 31, 2013, we have state net operating losses of approximately $28.0 million, which will begin to expire in the year 2023. The valuation allowance resulted from management's determination, based on available evidence, that it was more likely than not that the state net operating loss deferred tax asset balance of $1.5 million and $1.2 million as of March 31, 2013 and 2012, respectively, may not be realized.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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