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Income Taxes | 12 Months Ended
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Sep. 30, 2017
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The components of income from continuing operations, before income taxes are as follows (in thousands):
| Fiscal years ended September 30,
| 2017 |  | 2016 |  | 2015
United States | $ | 5,170 |  |  | $ | 9,841 |  |  | $ | 6,934 |
International | 4,321 |  |  | 6,849 |  |  | 6,183 |
Income from continuing operations, before income taxes | $ | 9,491 |  |  | $ | 16,690 |  |  | $ | 13,117 |
The components of the income tax provision are as follows (in thousands):
| Fiscal years ended September 30,
| 2017 |  | 2016 |  | 2015
Current: |  |  |  |  |
Federal | $ | 312 |  |  | $ | (141 | ) |  | $ | 1,452 |
State | 165 |  |  | 139 |  |  | 453 |
Foreign | 1,756 |  |  | 2,099 |  |  | 2,279 |
Deferred: |  |  |  |  |
U.S. | (1,454 | ) |  | 1,260 |  |  | (297 | )
Foreign | (654 | ) |  | (145 | ) |  | (203 | )
Income tax provision | $ | 125 |  |  | $ | 3,212 |  |  | $ | 3,684 |
The net deferred tax asset consists of the following (in thousands):
| As of September 30,
| 2017 |  | 2016
Current deferred tax asset | $ | — |  |  | $ | — |
Non-current deferred tax asset | 9,211 |  |  | 7,295 |
Current deferred tax liability | — |  |  | — |
Non-current deferred tax liability | (534 | ) |  | (616 | )
Net deferred tax asset | $ | 8,677 |  |  | $ | 6,679 |
Uncollectible accounts and other reserves | $ | 1,063 |  |  | $ | 915 |
Depreciation and amortization | (673 | ) |  | 421 |
Inventories | 824 |  |  | 683 |
Compensation costs | 5,863 |  |  | 4,925 |
Tax carryforwards | 7,514 |  |  | 6,263 |
Valuation allowance | (5,952 | ) |  | (5,970 | )
Identifiable intangible assets | (581 | ) |  | (558 | )
Other | 619 |  |  | — |
Net deferred tax asset | $ | 8,677 |  |  | $ | 6,679 |
As of September 30, 2017, we have estimated carryforwards for tax purposes as follows: We have $2.0 million of tax carryforwards (net of reserves) related to federal and state research and development tax credits. We also have $5.5 million of carryforwards (net, tax effected) consisting of U.S. capital loss of $5.1 million and non-U.S. net operating losses of $0.4 million. The majority of our federal research and development tax credits have a 20 year carryforward period. The state research and development tax credits have a 15 year carryforward period. The majority of our non-U.S. net operating losses have an unlimited carryforward period. Our non-U.S. tax credit carryforwards will expire in 2032. Our U.S. capital loss carryforward will expire in 2020. Our valuation allowance for certain U.S. and foreign locations remained consistent and was $6.0 million at both September 30, 2017 and September 30, 2016. The amount of the deferred tax assets realized could vary if there are differences in the timing 11. INCOME TAXES (CONTINUED) or amount of future reversals of existing deferred tax liabilities or changes in the amounts of future taxable income. If our future taxable income projections are not realized, an additional valuation allowance may be required, and would be reflected as income tax expense at the time that any such change in future taxable income is determined. The reconciliation of the statutory federal income tax amount to our income tax provision is as follows (in thousands):
| Fiscal years ended September 30,
| 2017 |  | 2016 |  | 2015
Statutory income tax amount | $ | 2,917 |  |  | $ | 5,548 |  |  | $ | 4,491 |
Increase (decrease) resulting from: |  |  |  |  |
State taxes, net of federal benefits | (125 | ) |  | 204 |  |  | (190 | )
Utilization of tax credits | (1,168 | ) |  | (1,116 | ) |  | (250 | )
Manufacturing deduction | (150 | ) |  | (450 | ) |  | (285 | )
Discrete tax benefits | (954 | ) |  | (1,461 | ) |  | (818 | )
Foreign operations | 218 |  |  | 276 |  |  | 181 |
Valuation reserve | 159 |  |  | (43 | ) |  | 297 |
Adjustment of tax contingency reserves | 257 |  |  | 202 |  |  | 71 |
Meals and entertainment | 63 |  |  | 55 |  |  | 64 |
Employee stock purchase plan | 79 |  |  | 83 |  |  | 76 |
Contingent consideration | (1,172 | ) |  | (154 | ) |  | — |
Other, net | 1 |  |  | 68 |  |  | 47 |
Income tax provision | $ | 125 |  |  | $ | 3,212 |  |  | $ | 3,684 |
During fiscal 2017, we recorded net tax benefits of $1.0 million, primarily from the reversal of tax reserves due to the expiration of statutes of limitation from U.S. and foreign tax jurisdictions. These benefits are included within the discrete tax benefits in the above table. During fiscal 2016, we recorded net tax benefits of $1.5 million, primarily from the reinstatement of the federal research and development tax credit for calendar year 2015 and the reversal of tax reserves due to the expiration of statutes of limitation from U.S. and foreign tax jurisdictions. In addition, we filed amended income tax returns resulting in an additional domestic refund related to qualified manufacturing activities. These benefits are included within the discrete tax benefits in the above table. During fiscal 2015, we recorded net tax benefits of $0.8 million, resulting from the reinstatement of the research and development tax credit for calendar year 2014, reversal of tax reserves due to the expiration of statute of limitations from U.S. and foreign tax jurisdictions and reversal of tax reserves due to the resolution of tax audits. These benefits are included within the discrete tax benefits in the above table. A reconciliation of the beginning and ending amount of unrecognized tax benefits is (in thousands):
| Fiscal years ended September 30,
| 2017 |  | 2016 |  | 2015
Unrecognized tax benefits at beginning of fiscal year | $ | 1,708 |  |  | $ | 1,618 |  |  | $ | 2,301 |
Increases related to: |  |  |  |  |
Prior year income tax positions | 21 |  |  | 107 |  |  | 110 |
Current year income tax positions | 257 |  |  | 240 |  |  | 144 |
Decreases related to: |  |  |  |  |
Prior year income tax positions | — |  |  | (71 | ) |  | (255 | )
Settlements | — |  |  | (30 | ) |  | (74 | )
Expiration of statute of limitations | (651 | ) |  | (156 | ) |  | (608 | )
Unrecognized tax benefits at end of fiscal year | $ | 1,335 |  |  | $ | 1,708 |  |  | $ | 1,618 |
11. INCOME TAXES (CONTINUED) The total amount of unrecognized tax benefits at September 30, 2017 that, if recognized, would affect our effective tax rate is $1.2 million. We expect that it is reasonably possible that the total amounts of unrecognized tax benefits will decrease approximately $0.1 million over the next 12 months due to the expiration of various statutes of limitations. Of the $1.3 million of unrecognized tax benefits, $0.7 million is included in non-current income taxes payable and $0.6 million is included with non-current deferred tax assets on the consolidated balance sheet at September 30, 2017. We recognize interest and penalties related to income tax matters in income tax expense. During fiscal 2017 and 2016, there were insignificant amounts of interest and penalties related to income tax matters in income tax expense. We had accrued interest and penalties related to unrecognized tax benefits of $0.1 million at September 30, 2017 and $0.2 million at September 30, 2016. These accrued interest and penalties are included in our non-current income taxes payable on our consolidated balance sheets. We file a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. With few exceptions, we are no longer subject to state and local or non-U.S. income tax examinations by tax authorities for years before fiscal year 2013. At September 30, 2017, we had approximately $34.6 million of un-taxed accumulated undistributed foreign earnings, for which we have not accrued additional U.S. tax. Our policy is to reinvest earnings of our foreign subsidiaries indefinitely to fund current operations and provide for future international expansion opportunities, and only repatriate earnings to the extent that U.S. taxes have already been recorded. Although we have no current need to repatriate historical earnings in the form of cash to the United States, if we change our assertion from indefinitely reinvesting undistributed foreign earnings, we would have to accrue applicable taxes. The amount of any taxes and the application of any tax credits would be determined based on the income tax laws at the time of such repatriation. Under current tax laws, we estimate the unrecognized deferred tax liability to be up to $0.6 million.

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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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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