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Income Taxes | 12 Months Ended
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Sep. 30, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | 9. INCOME TAXES: Earnings before income taxes consisted of the following components for the fiscal years ended September 30,
|  | 2017 |  |  | 2018 |  |  | 2019 |
|  | (Amounts in thousands) |
Earnings before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 37,808 |  |  | $ | 53,280 |  |  | $ | 46,986 |
Other |  |  | — |  |  |  | — |  |  |  | 1,967 |
Total |  | $ | 37,808 |  |  | $ | 53,280 |  |  | $ | 48,953 |
The components of our provision (benefit) from income taxes consisted of the following for the fiscal years ended September 30,
|  | 2017 |  |  | 2018 |  |  | 2019 |
|  | (Amounts in thousands) |
Current provision (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 2,321 |  |  | $ | 8,055 |  |  | $ | 7,933 |
Foreign |  |  | — |  |  |  | — |  |  |  | 516 |
State |  |  | (366 | ) |  |  | 195 |  |  |  | 135 |
Total current provision |  | $ | 1,955 |  |  | $ | 8,250 |  |  | $ | 8,584 |
Deferred provision (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 10,190 |  |  |  | 4,205 |  |  |  | 2,285 |
Foreign |  |  | — |  |  |  | — |  |  |  | — |
State |  |  | 2,116 |  |  |  | 1,513 |  |  |  | 2,099 |
Total deferred provision |  |  | 12,306 |  |  |  | 5,718 |  |  |  | 4,384 |
Total income tax provision |  | $ | 14,261 |  |  | $ | 13,968 |  |  | $ | 12,968 |
During the fourth quarter of fiscal 2017, the Company recorded a net tax benefit of $1.8 million primarily pertaining to a worthless stock deduction. The tax benefit of this deduction was primarily based on the write-off of the Company’s investment in its British Virgin Islands subsidiary for US tax purposes. On December 22, 2017, the Tax Act was enacted which, among a number of its provisions, lowered the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018. The Company’s blended statutory tax rate for fiscal year 2018 was approximately 24.5% as a result of the change in statutory rates. For fiscal year 2018, we recorded a non-cash adjustment to income tax expense of $805,000 for the remeasurement of deferred taxes on the enactment date. Below is a reconciliation of the statutory federal income tax rate to our effective tax rate for the fiscal years ended September 30,
|  | 2017 |  |  | 2018 |  |  | 2019 |
Federal tax provision |  |  | 35.0 | % |  |  | 24.5 | % |  |  | 21.0 | %
State taxes, net of federal effect |  |  | 4.4 | % |  |  | 4.1 | % |  |  | 4.1 | %
Worthless stock deduction |  |  | (4.8 | )% |  |  | — |  |  |  | — |
Stock based compensation |  |  | 0.2 | % |  |  | (2.0 | )% |  |  | — |
Valuation allowance |  |  | (0.1 | )% |  |  | (0.3 | )% |  |  | (0.1 | )%
Foreign rate differential |  |  | 2.4 | % |  |  | — |  |  |  | 0.2 | %
Effect of Federal Tax Reform |  |  | — |  |  |  | 1.5 | % |  |  | — |
Other |  |  | 0.6 | % |  |  | (1.6 | )% |  |  | 1.3 | %
Effective tax rate |  |  | 37.7 | % |  |  | 26.2 | % |  |  | 26.5 | %
Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. The tax effects of these temporary differences representing the components of deferred tax assets as of September 30,
|  | 2018 |  |  | 2019 |
|  | (Amounts in thousands) |
Deferred tax assets: |  |  |  |  |  |  |  |
Inventories |  | $ | 588 |  |  | $ | 774 |
Accrued expenses |  |  | 644 |  |  |  | 492 |
Stock based compensation |  |  | 2,258 |  |  |  | 2,388 |
Tax loss carryforwards |  |  | 3,910 |  |  |  | 2,316 |
Other |  |  | 580 |  |  |  | 562 |
Valuation allowance |  |  | (119 | ) |  |  | (164 | )
Total long-term deferred tax assets |  |  | 7,861 |  |  |  | 6,368 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | (4,453 | ) |  |  | (7,510 | )
Total long-term deferred tax liabilities |  | $ | (4,453 | ) |  | $ | (7,510 | )
Net deferred tax assets (liabilities) |  | $ | 3,408 |  |  | $ | (1,142 | )
Pursuant to ASC 740, we must consider all positive and negative evidence regarding the realization of deferred tax assets. ASC 740 provides four possible sources of taxable income to realize deferred tax assets: 1) taxable income in prior carryback years, 2) reversals of existing deferred tax liabilities, 3) tax planning strategies and 4) projected future taxable income. As of September 30, 2019, we have no available taxable income in prior carryback years, limited reversals of existing deferred tax liabilities or prudent and feasible tax planning strategies. Therefore, the recoverability of our deferred tax assets is dependent upon generating future taxable income. As of September 30, 2017, we no longer had federal net operating loss (NOL) carryforwards for federal income tax purposes. As of September 30, 2019, the Company has state NOL carryforwards of approximately $46.5 million for state income tax purposes, which resulted in a deferred tax asset of $2.3 million, and expire at various dates from 2029 through 2032. Significant judgment is required in evaluating our uncertain tax positions. Although we believe our tax return positions are sustainable, we recognize tax benefits from uncertain tax positions in the financial statements only when it is more likely than not that the positions will not be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits and a consideration of the relevant taxing authority's administrative practices and precedents. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as the related net interest and penalties. In fiscal 2017, the Company released a reserve for an uncertain tax position based on administrative practice in the applicable jurisdiction in the amount of $264,000 of which approximately $177,000 impacted the effective tax rate. As of September 30, 2018 and 2019, we had no gross unrecognized tax benefits. We are subject to tax by both federal and state taxing authorities. Until the respective statutes of limitations expire, we are subject to income tax audits in the jurisdictions in which we operate. We are no longer subject to U.S. Federal tax assessments for fiscal years prior to 2015, we are not subject to assessments prior to the 2014 fiscal year for the majority of the State jurisdictions and we are not subject to assessments prior to the 2014 calendar year for the majority of the foreign jurisdictions. In January 2018, the FASB released guidance on accounting for taxes on the global intangible low-taxed income (“GILTI”) provisions of the Tax Act. The guidance provides that a company can, subject to an accounting policy election, either record the tax impacts of GILTI inclusions as a period cost, or account for GILTI in deferred taxes. The Company has now finalized its election and will account for the tax impacts of GILTI inclusions as a period cost.

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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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