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Income Taxes | 12 Months Ended
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Jun. 30, 2023
Income Taxes |
Income Taxes | NOTE 7 - Income Taxes The provision for income taxes is comprised of the following (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Year ended June 30,
​ |  | 2023 |  | 2022 |  | 2021
Current income taxes: |  | ​ |  |  | ​ |  |  | ​ |
Federal | ​ | $ | 5,899 | ​ | $ | 2,161 | ​ | $ | 1,912
State | ​ |  | 1,020 | ​ |  | 300 | ​ |  | 265
​ | ​ |  | 6,919 | ​ |  | 2,461 | ​ |  | 2,177
Deferred income taxes: | ​ |  | ​ | ​ |  | ​ | ​ | ​ | ​
Federal | ​ | ​ | (2,334) | ​ | ​ | (214) | ​ |  | 337
State | ​ | ​ | (484) | ​ | ​ | — | ​ | ​ | —
​ | ​ | ​ | (2,818) | ​ |  | (214) | ​ |  | 337
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Provision for income taxes | ​ | $ | 4,101 | ​ | $ | 2,247 | ​ | $ | 2,514
​ A reconciliation of the U.S. Federal statutory income tax rate to our actual effective tax rate on earnings before income taxes is as follows for the years ended June 30, (dollars in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2023 | ​ | ​ | 2022 |  | ​ | 2021 |
​ | ​ | ​ | ​ | ​ | % of | ​ | ​ | ​ | ​ | ​ | % of | ​ | ​ | ​ | ​ | ​ | % of | ​
​ | ​ | ​ | ​ | ​ | Pre-tax | ​ | ​ | ​ | ​ | ​ | Pre-tax | ​ | ​ | ​ | ​ | ​ | Pre-tax | ​
​ |  | Amount |  | Income |  | ​ | Amount |  | Income |  | ​ | Amount |  | Income |
Tax at Federal statutory rate | ​ | $ | 6,558 | ​ | 21.0 | % | ​ | $ | 4,588 | ​ | 21.0 | % | ​ | $ | 3,765 | ​ | 21.0 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Increases (decreases) in taxes resulting from: |  | ​ |  |  |  |  | ​ | ​ |  |  |  | ​ | ​ | ​ |  |  |  | ​
Meals and entertainment |  | ​ | 48 |  | 0.2 | % | ​ | ​ | 29 |  | 0.1 | % | ​ | ​ | 29 |  | 0.2 | %
State income taxes, net of Federal income tax benefit |  | ​ | 436 |  | 1.4 | % | ​ | ​ | 238 |  | 1.1 | % | ​ | ​ | 135 |  | 0.8 | %
Global intangible low-taxed income | ​ | ​ | 2,739 | ​ | 8.8 | % | ​ | ​ | 1,697 | ​ | 7.8 | % | ​ | ​ | 1,706 | ​ | 9.5 | %
R&D Credit |  | ​ | (661) |  | (2.1) | % | ​ | ​ | (554) |  | (2.5) | % | ​ | ​ | (523) |  | (2.9) | %
Foreign withholding tax |  | ​ | — |  | — | % | ​ | ​ | — |  | — | % | ​ | ​ | 205 |  | 1 | %
Foreign Source income not subject to Tax | ​ | ​ | (5,524) | ​ | (17.7) | % | ​ | ​ | (3,231) | ​ | (14.8) | % | ​ | ​ | (3,353) | ​ | (19) | %
Non-taxable debt extinguishment |  | ​ | — |  | — | % | ​ | ​ | (820) |  | (3.8) | % | ​ | ​ | — |  | — | %
Uncertain Tax Positions |  | ​ | 63 |  | 0.2 | % | ​ | ​ | 20 |  | 0.1 | % | ​ | ​ | 312 |  | 1.7 | %
IRS examination settlements |  | ​ | — |  | — | % | ​ | ​ | — |  | — | % | ​ | ​ | — |  | — | %
Other, net |  | ​ | 442 |  | 1.4 | % | ​ | ​ | 280 |  | 1.3 | % | ​ | ​ | 238 |  | 1.3 | %
Effective tax rate | ​ | $ | 4,101 |  | 13.1 | % | ​ | $ | 2,247 |  | 10.3 | % | ​ | $ | 2,514 |  | 14.0 | %
​ Deferred tax assets and deferred tax liabilities at June 30, 2023 and 2022 are as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Deferred Tax Assets (Liabilities)
​ |  | 2023 |  | 2022
Accounts receivable | ​ | $ | 22 | ​ | $ | 42
Inventories | ​ |  | 397 | ​ |  | 413
Accrued liabilities | ​ |  | 857 | ​ |  | 454
Stock based compensation expense | ​ |  | 250 | ​ |  | 179
Revenue reserves | ​ | ​ | 333 | ​ | ​ | 466
Unrealized loss (gain) on marketable securities | ​ | ​ | 124 | ​ | ​ | 90
Capitalized research and development cost | ​ | ​ | 2,923 | ​ | ​ | —
Other | ​ | ​ | 4 | ​ | ​ | —
Total Deferred Tax Assets | ​ | $ | 4,910 | ​ | $ | 1,644
Valuation allowance | ​ |  | — | ​ |  | —
Deferred income tax assets, net of valuation allowance | ​ | $ | 4,910 | ​ | $ | 1,644
​ | ​ | ​ | ​ | ​ | ​ | ​
Intangibles | ​ |  | (916) | ​ |  | (615)
Property, plant and equipment | ​ |  | (729) | ​ |  | (582)
Other deferred tax liabilities | ​ |  | (613) | ​ |  | (613)
Total Deferred Tax Liability | ​ | $ | (2,258) | ​ | $ | (1,810)
​ | ​ | ​ | ​ | ​ | ​ | ​
Net Deferred Tax Asset/(Liability) | ​ | $ | 2,652 | ​ | $ | (166)
​ The Company has identified the United States and New York State as its major tax jurisdictions. Fiscal year 2018 and forward years are still open for examination. In addition, the Company has a wholly-owned subsidiary which operates in a Free Zone in the Dominican Republic (“DR”) and is exempt from DR income tax. The Company was audited by the IRS for the fiscal year 2017. The Company received Form 4549-A, Income Tax Examination Changes from the IRS proposing an adjustment to income for the fiscal 2017 tax year regarding deemed dividends based on its interpretation under IRC Section 956 arising from the intercompany balances on the books of the Company. During the third quarter of fiscal 2021, the Company settled the issue and paid the IRS $399,000. The Company reported the results of the IRS exam to all the jurisdictions in which it files and paid taxes and interest totaling $97,000. Subsequent to the quarter end, the Company paid the IRS $68,000 for interest. None of the payments were recorded to expense in 2021, since liabilities had previously been established. In December 2022, the Company received a letter from the IRS (“IRS”) notifying it that the IRS has closed its examination of the Company’s income tax return for fiscal year ended June 30, 2020. There have been no changes proposed in relation to this examination. The provision for income taxes represents Federal, foreign, and state and local income taxes. The effective rate differs from statutory rates due to the effect of tax rates in foreign jurisdictions, state and local income taxes, tax benefit of R&D credits, certain nondeductible expenses, uncertain tax positions and global intangible low-taxed income ("GILTI"). During the year ending June 30, 2023, the Company increased its reserve for uncertain income tax positions by $22,000. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense and accrued income taxes. As of June 30, 2023, the Company had accrued interest totaling $139,000, penalties totaling $5,000, and $700,000 of unrecognized net tax benefits that, if recognized, would favorably affect the Company’s effective income tax rate in any future period. The Company does not expect that its unrecognized tax benefits will significantly change within the next twelve months. The Company claims R&D tax credits on eligible research and development expenditures. The R&D tax credits are recognized as a reduction to income tax expense. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2023 |  | 2022 |  | 2021
Balance of gross unrecognized tax benefits as of Beginning of Year | ​ | $ | 678 | ​ | $ | 678 | ​ | $ | 866
Increase (Decrease) to unrecognized tax benefits from deemed dividends for investments in US property | ​ | ​ | — | ​ |  | — | ​ |  | (3)
Increase (Decrease) to unrecognized tax benefits resulting from the release of R&D credits due to the settled IRS audit | ​ |  | — | ​ |  | — | ​ |  | (185)
Increase (Decrease) to unrecognized tax benefits resulting from a state filing tax position | ​ |  | 22 | ​ |  | — | ​ |  | —
Balance of gross unrecognized tax benefits as of End of Year | ​ | $ | 700 | ​ | $ | 678 | ​ | $ | 678
​

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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/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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