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Note 9 - Income Taxes | 12 Months Ended
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Dec. 31, 2016
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
| (9) | Income Taxes
The Company’s income tax provision for the years ended December 31, 2016, 2015 and 2014 consists of the following (in thousands):
|  | Years Ended December 31,
|  | 2016 |  | 2015 |  | 2014
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 3,120 |  |  | $ | 3,131 |  |  | $ | 2,638 |
State |  |  | 651 |  |  |  | 580 |  |  |  | 336 |
|  |  | 3,771 |  |  |  | 3,711 |  |  |  | 2,974 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 546 |  |  |  | 508 |  |  |  | 1,262 |
State |  |  | 30 |  |  |  | (71 | ) |  |  | (30 | )
|  |  | 576 |  |  |  | 437 |  |  |  | 1,232 |
Total income tax provision |  | $ | 4,347 |  |  | $ | 4,148 |  |  | $ | 4,206 |
At December 31, 2016, the Company had net operating loss carryforwards for federal income tax purposes of approximately $119,000, which are available to offset future taxable income and expire during the federal tax year ending December 31, 2019. The approximate tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows (in thousands):
|  | December 31,
|  | 2016 |  | 2015
Deferred tax assets: |  |  |  |  |  |  |  |
Reserves |  | $ | 531 |  |  | $ | 532 |
Inventory capitalization |  |  | 427 |  |  |  | 407 |
Compensation programs |  |  | 578 |  |  |  | 501 |
Retirement liability |  |  | 19 |  |  |  | 27 |
Equity-based compensation |  |  | 257 |  |  |  | 290 |
Net operating loss carryforwards |  |  | 40 |  |  |  | 141 |
Deferred rent |  |  | 7 |  |  |  | 10 |
Intangible assets |  |  | 340 |  |  |  | 264 |
Total deferred tax assets |  |  | 2,199 |  |  |  | 2,172 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Excess of book over tax basis of fixed assets |  |  | (4,767 | ) |  |  | (4,186 | )
Goodwill |  |  | (891 | ) |  |  | (869 | )
Total deferred tax liabilities |  |  | (5,658 | ) |  |  | (5,055 | )
Net long-term deferred tax liabilities |  | $ | (3,459 | ) |  | $ | (2,883 | )
The amounts recorded as deferred tax assets as of December 31, 2016, and 2015, represent the amount of tax benefits of existing deductible temporary differences or carryforwards that are more likely than not to be realized through the generation of sufficient future taxable income within the carryforward period. The Company has total deferred tax assets of $2.2 million at December 31, 2016, that it believes are more likely than not to be realized in the carryforward period. Management reviews the recoverability of deferred tax assets during each reporting period. The actual tax provision for the years presented differs from the “expected” tax provision for those years, computed by applying the U.S. federal corporate rate of 34.0% to income before income tax expense as follows:
|  | Years Ended December 31,
|  | 2016 |  | 2015 |  | 2014
Computed “expected” tax rate |  |  | 34.0 | % |  |  | 34.0 | % |  |  | 34.0 | %
Increase (decrease) in income taxes resulting from: |  |  |  |  |  |  |  |  |  |  |  |
State taxes, net of federal tax benefit |  |  | 3.7 |  |  |  | 2.3 |  |  |  | 1.1 |
Meals and entertainment |  |  | 0.2 |  |  |  | 0.3 |  |  |  | 0.3 |
R&D credits |  |  | (0.6 | ) |  |  | (0.8 | ) |  |  | (0.7 | )
Domestic production deduction |  |  | (2.5 | ) |  |  | (2.5 | ) |  |  | (1.4 | )
Non-deductible ISO stock option expense |  |  | 0.3 |  |  |  | 0.4 |  |  |  | 0.4 |
Unrecognized tax benefits |  |  | (0.1 | ) |  |  | - |  |  |  | 1.3 |
Other |  |  | 0.3 |  |  |  | 1.6 |  |  |  | 0.8 |
Effective tax rate |  |  | 35.3 | % |  |  | 35.3 | % |  |  | 35.8 | %
The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company has not been audited by any state for income taxes with the exception of returns filed in Michigan which have been audited through 2004, income tax returns filed in Massachusetts which have been audited through 2007, income tax returns filed in Florida which have been audited through 2009 and income tax returns in Colorado which have been audited through 2013. An audit for income tax returns filed in New Jersey for the years 2009 through 2012 is currently in progress. An audit for the Company’s federal tax return for 2014 is currently in progress. Federal and state tax returns for the years 2013 through 2016 remain open to examination by the IRS and various state jurisdictions. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (“UTB”) resulting from uncertain tax positions is as follows (in thousands):
|  | December 31,
|  | 2016 |  | 2015
Gross UTB balance at beginning of fiscal year |  | $ | 162 |  |  | $ | 230 |
Reductions for tax positions of prior years |  |  | (12 | ) |  |  | (68 | )
Gross UTB balance at end of fiscal year |  | $ | 150 |  |  | $ | 162 |
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of December 31, 2016 and 2015, is $150,000 and $162,000, respectively. In addition, the total amount of accrued interest and penalties on uncertain tax positions at December 31, 2016 and 2015 is $153,000 and $153,000, respectively. At December 31, 2016, all of the unrecognized tax benefits relate to tax returns of a specific state jurisdiction that are currently under examination. Accordingly, the Company expects a reduction of this amount in 2017, as the examination is expected to close within the next 12 -months.

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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 Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: 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=65882285&loc=d3e32559-109319 Reference 3: 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=65882285&loc=d3e32718-109319 Reference 4: 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=65882285&loc=d3e32639-109319 Reference 5: 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=65882285&loc=d3e32537-109319 + Details
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