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Note 3 - Income Taxes | 12 Months Ended
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Sep. 30, 2013
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | 3. INCOME TAXES The provision for income taxes consists of the following:
|  | 2013 |  |  | 2012 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | 1,011,000 |  |  | $ | 1,840,000 |
State |  |  | (228,000 | ) |  |  | 781,000 |
|  |  | 783,000 |  |  |  | 2,621,000 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | (30,000 | ) |  |  | (223,000 | )
State |  |  | 37,000 |  |  |  | (38,000 | )
|  |  | 7,000 |  |  |  | (261,000 | )
|  | $ | 790,000 |  |  | $ | 2,360,000 |
The difference between the statutory federal income tax rate and the Company’s effective rate is summarized below:
|  | 2013 |  |  | 2012 |
Statutory federal income tax rate |  |  | 34.0 | % |  |  | 34.0 | %
State franchise taxes (net of federal tax benefit) |  |  | 5.0 |  |  |  | 5.8 |
Effect of state rate change on beginning balance of deferred tax liabilities |  |  | (9.4 | ) |  |  | — |
Reversal of liability for uncertain tax position |  |  | — |  |  |  | (3.6 | )
Other, primarily dividends received deduction and domestic production activity deduction |  |  | (12.3 | ) |  |  | (6.4 | )
Effective tax rate |  |  | 17.3 | % |  |  | 29.8 | %
At September 30, 2013, the Company’s deferred income tax assets and liabilities were comprised of the following:
|  | 2013 |  |  | 2012 |
Deferred tax assets attributable to: |  |  |  |  |  |  |  |
Accrued liabilities, including supplemental Compensation and vacation pay accrual |  | $ | 1,083,000 |  |  | $ | 1,817,000 |
Impairment losses on investments |  |  | 1,778,000 |  |  |  | 1,135,000 |
Bad debt reserves not yet deductible |  |  | 78,000 |  |  |  | 80,000 |
Depreciation and amortization |  |  | 356,000 |  |  |  | 49,000 |
Other |  |  | 41,000 |  |  |  | 262,000 |
Total deferred tax assets |  |  | 3,336,000 |  |  |  | 3,343,000 |
Deferred tax liabilities attributable to: |  |  |  |  |  |  |  |
Unrealized gains on investments |  |  | (34,610,000 | ) |  |  | (20,898,000 | )
Net deferred income taxes |  | $ | (31,274,000 | ) |  | $ | (17,555,000 | )
Based on the Company’s assessment of the future realizability of its deferred assets, including the consideration of historical levels of income, expectations and risks associated with estimates of future taxable income, no valuation allowance was recorded as of September 30, 2013 and 2012. On a pretax profit of $4,569,000 and $7,901,000 for the fiscal years ended September 30, 2013 and 2012, respectively, the Company recorded a tax provision of $790,000 and $2,360,000 respectively, which was lower in each case than the amount computed using the statutory rate because of the available dividends received deduction, the domestic production activity deduction and a change this year in California franchise taxes regarding revenue allocation among states resulting in a lower California tax rate which reduced the current year’s tax rate and prior years’ deferred taxes on the unrealized appreciation of the Company’s investments by $500,000. In fiscal 2012, there was a reversal of an uncertain tax liability as the Company reached an agreement with the Internal Revenue Service in March 2012 to settle the Company’s previously claimed research and development credits in its tax returns for the years 2002 to 2007. Consequently, the Company’s effective tax rate was 17% and 30% for fiscal 2013 and 2012, respectively. The acquisition of New Dawn was structured as a stock acquisition with an Internal Revenue Code Section 338(h)(10) election, which results in the acquisition being treated as an acquisition of assets for income tax purposes. The ISD acquisition was structured as an asset purchase. As such, the amounts allocated to purchased software and customer relationships as well as goodwill are amortized over a 15-year period on a straight-line basis for tax purposes. Differences in the amortization period and methods between book and tax useful lives will result in deferred tax assets or liabilities. The Company files federal income tax returns in the United States and with various state jurisdictions and is no longer subject to examinations for years before 2010 with regard to federal income taxes. At September 30, 2013, there was no unrecognized tax liability for the uncertain tax positions that were settled with the Internal Revenue Service.

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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 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: 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 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 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=6907707&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=6907707&loc=d3e32537-109319 Reference 6: 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=6907707&loc=d3e32559-109319 + Details
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