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Note 12 - Income Taxes | 12 Months Ended
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Dec. 31, 2021
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | 12. Income Taxes The Company's provision (benefit) for income taxes comprises the following:
|  | For the year ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 19,211,782 |  |  | $ | 5,111,667 |  |  | $ | (663,114 | )
State and local |  |  | 513,753 |  |  |  | 447,965 |  |  |  | 143,455 |
Foreign |  |  | 13,994 |  |  |  | — |  |  |  | — |
Total current provision (benefit) |  |  | 19,739,529 |  |  |  | 5,559,632 |  |  |  | (519,659 | )
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 89,947 |  |  |  | 11,375,962 |  |  |  | (2,092,585 | )
State and local |  |  | 31,499 |  |  |  | 230,987 |  |  |  | (325,032 | )
Foreign |  |  | — |  |  |  | — |  |  |  | — |
Total deferred provision (benefit) |  |  | 121,446 |  |  |  | 11,606,949 |  |  |  | (2,417,617 | )
Total provision (benefit) |  | $ | 19,860,975 |  |  | $ | 17,166,581 |  |  | $ | (2,937,276 | )
The Company’s deferred tax assets and liabilities comprise the following:
|  | As of December 31, |
|  | 2021 |  |  | 2020(1) |
Deferred income tax assets: |  |  |  |  |  |  |  |
Net operating losses |  | $ | 1,293,912 |  |  | $ | 1,293,842 |
Inventory |  |  | 184,046 |  |  |  | 224,656 |
Reserves and accruals |  |  | 741,684 |  |  |  | 725,875 |
Amortization of intangible assets |  |  | 50,107 |  |  |  | 80,930 |
Share-based compensation |  |  | 280,396 |  |  |  | 398,165 |
Deferred revenue |  |  | 702,617 |  |  |  | 709,480 |
Lease liability |  |  | 570,446 |  |  |  | 520,830 |
Other |  |  | 267,050 |  |  |  | 191,174 |
Deferred income tax assets |  |  | 4,090,258 |  |  |  | 4,144,952 |
Less: valuation allowance |  |  | (1,022,191 | ) |  |  | (1,022,135 | )
Deferred income tax assets, net of valuation allowance |  | $ | 3,068,067 |  |  | $ | 3,122,817 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Amortization of goodwill |  |  | (197,245 | ) |  |  | (199,172 | )
Property, plant and equipment |  |  | (156,289 | ) |  |  | (81,065 | )
Other |  |  | (291,926 | ) |  |  | (298,527 | )
Deferred income tax asset, net |  | $ | 2,422,607 |  |  | $ | 2,544,053 |
(1) Certain prior year amounts were reclassed to conform with current year presentation. The recognition of a valuation allowance for deferred taxes requires management to make estimates and judgments about the Company’s future profitability which is inherently uncertain. The Company assesses all available positive and negative evidence to determine if its existing deferred tax assets are realizable on a more-likely-than-not basis. In making such assessment, the Company considered the reversal of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operating results. The ultimate realization of a deferred tax asset is ultimately dependent on the Company's generation of sufficient taxable income within the available net operating loss carryback and/or carryforward periods to utilize the deductible temporary differences. As of December 31, 2021, the Company has a valuation allowance on certain state and local net operating losses which the Company determined were not realizable on a more-likely-than-not basis. The Company's valuation allowance did not change materially from prior years. The benefit for income taxes differs from the expected amount calculated by applying the Company's statutory rate to the income or loss before benefit for income taxes as follows:
|  | As of December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Statutory federal income tax rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State and local taxes |  |  | 0.5 | % |  |  | 0.7 | % |  |  | 1.3 | %
Change in fair value of common stock warrant |  |  | — |  |  |  | 1.0 | % |  |  | 10.5 | %
Section 162(m) limitation |  |  | 0.5 | % |  |  | 0.5 | % |  |  | (6.0 | )%
Other |  |  | 0.2 | % |  |  | 0.2 | % |  |  | 2.1 | %
Effective tax rate |  |  | 22.2 | % |  |  | 23.4 | % |  |  | 28.9 | %
For the year ended December 31, 2021, the Company’s effective tax rate differs from the statutory rate of 21% primarily as a result of non-deductible executive compensation under IRC Section 162(m) and state and local taxes. For the year ended December 31, 2020, the Company's effective tax rate differs from the statutory rate of 21% primarily as a result of non-deductible executive compensation under IRC Section 162(m), a non-taxable adjustment for the fair market value of the Warrant, and state and local taxes. A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows:
|  | For the year ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Balance at beginning of year |  | $ | 5,591,587 |  |  | $ | 5,649,188 |  |  | $ | 5,738,964 |
Tax positions related to the current and prior years: |  |  |  |  |  |  |  |  |  |  |  |
Additions |  |  | 11,000 |  |  |  | — |  |  |  | — |
Reductions |  |  | — |  |  |  | (57,601 | ) |  |  | (89,776 | )
Settlements |  |  | — |  |  |  | — |  |  |  | — |
Lapses in applicable statutes of limitation |  |  | — |  |  |  | — |  |  |  | — |
Balance at the end of the year |  | $ | 5,602,587 |  |  | $ | 5,591,587 |  |  | $ | 5,649,188 |
Included in the balance of unrecognized tax benefits as of December 31, 2021, are potential benefits of $5.6 million that, if recognized, would affect the effective tax rate. For the years ended December 31, 2021 and December 31, 2020, interest and penalties on unrecognized tax benefits were $95,000 and $65,000, respectively. There are no uncertain tax positions for which it is reasonably possible that the total amounts of unrecognized benefits will significantly increase or decrease within twelve months from December 31, 2021. The Company files federal income tax returns and income tax returns in various state and local tax jurisdictions. The federal tax years open to examination are 2018 to 2021. The Company's state and local tax years that are open to tax examination are generally 2017 to 2021.

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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