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INCOME TAXES | 12 Months Ended
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Mar. 31, 2018
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 4 – INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act (H.R. 1), the tax reform bill (the "Tax Act"), was signed into law. The Tax Act includes numerous changes to existing tax law, including a permanent reduction in the federal corporate income tax rate from 35% to 21%. Since the Company is a fiscal year taxpayer, the lower corporate income tax rate will be phased in and the U.S. federal tax rate recorded is a blended rate of the old rates and the new rates for fiscal year 2018. The Company has concluded that the Tax Act will cause the Company’s U.S. deferred tax assets and liabilities to be revalued. Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and their reported basis in the financial statements that will result in taxable or deductible amounts in future years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are revalued and any change is adjusted through the provision for income tax expense in the reporting period of the enactment. In addition, the Tax Act provides for a one-time “deemed repatriation” of accumulated foreign earnings. The Company has estimated the additional provision for income tax expense on the repatriation to be less than $0.1 million. The Company will pay any amounts owed over eight years. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. The Company has recognized the provisional tax impacts related to the revaluation of the deferred tax assets and liabilities and other applicable provisions of the Tax Act and included these amounts in its consolidated financial statements for the year ended March 31, 2018. As of March 31, 2018, the Company has completed the majority of the accounting for the tax effects of the Tax Act. If revisions are needed as new information becomes available, the final determination of the deemed revaluation of our deferred tax assets and liabilities or other applicable provisions of the Tax Act will be completed as additional information becomes available, but no later than one year from the enactment of the Tax Act. Transcat’s income before income taxes on the Consolidated Statements of Income is as follows:
|  | FY 2018 |  | FY 2017
United States |  | $ | 6,995 |  | $ | 6,770
Foreign |  |  | 953 |  |  | 394
Total |  | $ | 7,948 |  | $ | 7,164
The provision for income taxes for fiscal years 2018 and 2017 is as follows:
|  | FY 2018 |  | FY 2017
Current Tax Provision: |  |  |  |  |  |  |  |
Federal |  | $ | 952 |  |  | $ | 1,945 |
State |  |  | 201 |  |  |  | 344 |
Foreign |  |  | 340 |  |  |  | 279 |
|  |  | 1,493 |  |  |  | 2,568 |
Deferred Tax (Benefit) Provision: |  |  |  |  |  |  |  |
Federal |  | $ | 487 |  |  | $ | 194 |
State |  |  | 156 |  |  |  | 26 |
Foreign |  |  | (110 | ) |  |  | (146 | )
|  |  | 533 |  |  |  | 74 |
Provision for Income Taxes |  | $ | 2,026 |  |  | $ | 2,642 |
A reconciliation of the income tax provision computed by applying the statutory U.S. federal income tax rate and the income tax provision reflected in the Consolidated Statements of Income is as follows:
|  | FY 2018 |  | FY 2017
Federal Income Tax at Statutory Rate |  | $ | 2,448 |  |  | $ | 2,436 |
State Income Taxes, net of federal benefit |  |  | 295 |  |  |  | 284 |
Federal, State and Foreign Research & Development Credits |  |  | (107 | ) |  |  | 118 |
Impact of Tax Act |  |  | (535 | ) |  |  | - |
Other, net |  |  | (75 | ) |  |  | (196 | )
Total |  | $ | 2,026 |  |  | $ | 2,642 |
The components of net deferred tax assets (liabilities) are as follows:
|  | March 31, |  | March 25,
|  | 2018 |  | 2017
Deferred Tax Assets: |  |  |  |  |  |  |  |
Accrued Liabilities |  | $ | 247 |  |  | $ | 338 |
Performance-Based Stock Award Grants |  |  | 337 |  |  |  | 337 |
Inventory Reserves |  |  | 82 |  |  |  | 213 |
Non-Qualified Deferred Compensation Plan |  |  | 172 |  |  |  | 273 |
Post-Retirement Health Care Plans |  |  | 294 |  |  |  | 425 |
Stock-Based Compensation |  |  | 199 |  |  |  | 717 |
Capitalized Inventory Costs |  |  | 122 |  |  |  | 140 |
Net Operating Loss Carryforward |  |  | - |  |  |  | 12 |
Other |  |  | 233 |  |  |  | 277 |
Total Deferred Tax Assets |  | $ | 1,686 |  |  | $ | 2,732 |
Deferred Tax Liabilities: |  |  |  |  |  |  |  |
Goodwill and Intangible Assets |  | $ | (1,085 | ) |  | $ | (1,486 | )
Depreciation |  |  | (2,264 | ) |  |  | (2,335 | )
Other |  |  | (46 | ) |  |  | (45 | )
Total Deferred Tax Liabilities |  |  | (3,395 | ) |  |  | (3,866 | )
Net Deferred Tax Liabilities |  | $ | (1,709 | ) |  | $ | (1,134 | )
Deferred U.S. income taxes have not been recorded for basis differences related to the investments in the Company’s foreign subsidiary. The Company considers undistributed earnings, if any, as permanently reinvested in the subsidiary. The determination of a deferred tax liability on unremitted earnings would not be practicable because such liability, if any, would depend on circumstances existing if and when remittance occurs. The Company files income tax returns in the U.S. federal jurisdiction, various states and Canada. The Company is no longer subject to examination by U.S. federal income tax authorities for fiscal years 2014 and prior, by state tax authorities for fiscal years 2012 and prior, and by Canadian tax authorities for fiscal years 2010 and prior. There are no tax years currently under examination by U.S. federal, state or Canadian tax authorities. During fiscal years 2018 and 2017, there were no uncertain tax positions. No interest or penalties related to uncertain tax positions were recognized in fiscal years 2018 and 2017 or were accrued at March 31, 2018 and March 25, 2017. The Company’s effective tax rate for fiscal years 2018 and 2017 was 25.5% and 31.3%, respectively. Its tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amounts of income the Company earns in those jurisdictions, which the Company expects to be fairly consistent in the near term. It is also affected by discrete items that may occur in any given year but are not consistent from year to year. The Company expects to receive certain federal, state and Canadian tax credits in future years. As such, it expects its effective tax rate in fiscal year 2019 to be between 25.0% and 27.0%.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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