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Income Taxes
 12 Months Ended
Jun. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

10. Income Taxes

The following are the components of income taxes (benefit) (in thousands):

Fiscal years ended June 30,  2023  2022
       
Current          
Federal  $3,137   $1,510 
State   786    269 
    3,923    1,779 
           
Deferred          
Federal   220    (118)
State   137    (46)
    357    (164)
   $4,280   $1,615 

 

The reconciliation of income tax expense computed at the federal statutory tax rate of 21% for the fiscal years ended June 30, 2023 and 2022 to the provision for income taxes is as follows (in thousands):

 

Fiscal years ended June 30,  2023  2022
       
Tax at the statutory rate  $2,940   $1,198 
State income taxes, net of federal benefit   747    143 
Nondeductible compensation   558    251 
Other   35    23 
   $4,280   $1,615 
           
Effective tax rate   30.6%    28.3% 

 

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, 2023 and 2022 were as follows (in thousands):

 

As of June 30,  2023  2022
       
Deferred tax assets:          
Allowance for doubtful accounts  $418   $298 
Inventory capitalization   1,074    711 
Stock compensation   1,013    697 
Accrued liabilities   1,073    978 
Other   116    58 
    3,694    2,742 
           
Deferred tax liabilities:          
Goodwill   (4,946)   (3,850)
Depreciation   (2,104)   (1,855)
Intangible assets   (1,472)   (1,544)
Other   (195)   (159)
    (8,717)   (7,408)
Net deferred income tax (liabilities) assets  $(5,023)  $(4,666)

 

As of June 30, 2023, the Company was subject to potential federal and state tax examinations for the tax years including and subsequent to 2018.