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Income Taxes | 12 Months Ended
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Jun. 30, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | 13. Income Taxes The following are the components of income taxes (benefit) (in thousands):
Fiscal years ended June 30, |  | 2022 |  | 2021
Current |  |  |  |  |  |  |  |
Federal |  | $ | 1,510 |  |  | $ | (186 | )
State |  |  | 269 |  |  |  | 97 |
|  |  | 1,779 |  |  |  | (89 | )
Deferred |  |  |  |  |  |  |  |
Federal |  |  | (118 | ) |  |  | 1,402 |
State |  |  | (46 | ) |  |  | 191 |
|  |  | (164 | ) |  |  | 1,593 |
|  | $ | 1,615 |  |  | $ | 1,504 |
63 Table of Contents
EVI Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
The reconciliation of income tax expense computed at the federal statutory tax rate of 21% for the fiscal years ended June 30, 2022 and 2021 to the provision for income taxes is as follows (in thousands):
Fiscal years ended June 30, |  | 2022 |  | 2021
Tax at the statutory rate |  | $ | 1,198 |  |  | $ | 2,076 |
State income taxes, net of federal benefit |  |  | 143 |  |  |  | 265 |
Nondeductible compensation |  |  | 251 |  |  |  | 348 |
PPP Loan forgiveness |  |  | - |  |  |  | (1,462 | )
Other |  |  | 23 |  |  |  | 277 |
|  | $ | 1,615 |  |  | $ | 1,504 |
Effective tax rate |  |  | 28.3 | % |  |  | 15.2 | %
Deferred income taxes reflect the net tax effect of temporary differences between the basis of assets and liabilities for financial reporting purposes and the basis used for income tax purposes. Significant components of the Company’s current and noncurrent deferred tax assets and liabilities as of June 30, 2022 and 2021 were as follows (in thousands):
Fiscal years ended June 30, |  | 2022 |  | 2021
Deferred tax assets: |  |  |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | 298 |  |  | $ | 182 |
Inventory capitalization |  |  | 711 |  |  |  | 353 |
Stock compensation |  |  | 697 |  |  |  | 557 |
Accrued liabilities |  |  | 978 |  |  |  | 605 |
Other |  |  | 58 |  |  |  | 69 |
|  |  | 2,742 |  |  |  | 1,766 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Goodwill |  |  | (3,850 | ) |  |  | (2,974 | )
Depreciation |  |  | (1,855 | ) |  |  | (1,533 | )
Intangible assets |  |  | (1,544 | ) |  |  | (1,268 | )
Other |  |  | (159 | ) |  |  | (199 | )
|  |  | (7,408 | ) |  |  | (5,974 | )
Net deferred income tax (liabilities) assets |  | $ | (4,666 | ) |  | $ | (4,208 | )
As of June 30, 2022, the Company was subject to potential federal and state tax examinations for the tax years including and subsequent to 2017.

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