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INCOME TAXES
 12 Months Ended
Jan. 31, 2013
Income Tax Disclosure [Text Block]
14. INCOME TAXES

The (benefit) provision for income taxes from continuing operations for fiscal years 2012, 2011 and 2010 consists of the following (amounts in thousands):


    2012     2011     2010  
                         
Federal:                        
Current   $ —     $ 434       —  
Deferred     (1,611 )     13,842       10,731  
                         
      (1,611 )     14,276       10,731  
                         
State and Local:                        
Current     —       685       —  
Deferred     (28 )     996       1,627  
                         
      (28 )     1,681       1,627  
                         
(Benefit) provision for income taxes   $ (1,639 )   $ 15,957     $ 12,358  

The tax effects of significant temporary differences representing deferred tax assets and liabilities are as follows as of January 31, 2013 and 2012 (amounts in thousands):


    2013     2012  
                 
Assets:                
Deferral of service contract income   $ 136     $ 590  
Accrued liabilities     46       553  
Installment sales of limited partnerships     —       288  
Stock based compensation     338       406  
Property and equipment, net     613       —  
Federal net operating loss carryforward     7,625       —  
AMT credit carryforward     23,589       23,994  
Alcohol fuels tax credit     573       —  
State net operating loss carryforward     3,236       2,338  
Other items     748       1,305  
Valuation allowance     (1,891 )     (1,676 )
                 
Total     35,013       27,798  
Liabilities:                
Basis in pass through entities, including depreciation     (36,489 )     (29,068 )
Other     (1,735 )     (282 )
                 
Total     (38,224 )     (29,350 )
Net deferred tax liability   $ (3,211 )   $ (1,552 )

The Company has approximately $23.6 million and $24.0 million of AMT credit carryforwards as of January 31, 2013 and 2012, respectively. The AMT credit carryforwards can be used to offset future regular income tax liabilities subject to certain limitations. The AMT credit carryforwards have no expiration date. The Company must generate approximately $157 million in future taxable income to fully utilize the AMT credit carryforward. If the Company is not able to generate sufficient taxable income in subsequent years to allow for the utilization of the deferred tax assets, the Company would need to provide a valuation allowance for such deferred tax assets, thus increasing income tax expense.


The Company has a federal net operating loss carryforward of approximately $21.8 million which expires in fiscal year 2032.


The Company has state net operating loss carryforwards of approximately $40.9 million, net of the federal benefit, which will begin to expire in fiscal year 2013.


The Company has a valuation allowance of approximately $1,891,000 at January 31, 2013. The Company increased the valuation allowance by $215,000, $434,000 and $664,000 in fiscal years 2012 2011, and 2010, respectively. These adjustments to the valuation allowance are a result of estimates of realizing certain future state tax benefits.


The Company paid income taxes of approximately $51,000, $1,550,000 and $1,310,000 in fiscal years 2012, 2011 and 2010, respectively. The Company received refunds of income taxes of approximately $1,005,000, $7,208,000 and $5,691,000 in fiscal years 2012, 2011 and 2010, respectively.


The effective income tax rate on consolidated pre-tax loss or income differs from the federal income tax statutory rate for fiscal years 2012, 2011 and 2010 as follows:


    2012     2011     2010  
                         
Federal income tax at statutory rate     35.0 %     35.0 %     35.0 %
State and local taxes, net of federal tax benefit     5.3       4.1       0.9  
Net increase in valuation allowance     (4.7 )     1.6       2.1  
Domestic production activities deduction     —       (3.8 )     —  
Uncertain tax positions     (1.4 )     0.2       0.3  
Noncontrolling interest     6.5       (4.1 )     (2.3 )
Other     1.8       0.2       (0.3 )
                         
Total     42.5 %     33.2 %     35.7 %

The Company files a U.S. federal income tax return and income tax returns in various states. In general, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for fiscal years ended January 31, 2009 and prior.


The Company applies the provisions of ASC 740-10-25-5 for uncertain tax positions. As a result of the adoption of this accounting standard, the Company recorded a $287,000 decrease to retained earnings. As of January 31, 2013, total unrecognized tax benefits were $1,768,000, and accrued penalties and interest were $389,000. If the Company were to prevail on all unrecognized tax benefits recorded, approximately $82,000 of the reserve would benefit the effective tax rate. In addition, the impact of penalties and interest would also benefit the effective tax rate. Interest and penalties associated with unrecognized tax benefits are recorded within income tax expense.


On a quarterly and annual basis, the Company accrues for the effects of open uncertain tax positions and the related potential penalties and interest. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during the next 12 months; however, the Company does not expect the change to have a material effect on results of operations or financial position. A reconciliation of the beginning and ending amount of unrecognized tax benefits, including interest and penalties, is as follows (dollars in thousands):


    Years Ended  
    January 31,  
    2013     2012  
             
Unrecognized tax benefits, beginning of year   $ 2,484     $ 2,976  
Changes for tax positions for prior years     (327 )     (492 )
Changes for tax positions for current year     —       —  
                 
Unrecognized tax benefits, end of year   $ 2,157     $ 2,484