XML 26 R15.htm IDEA: XBRL DOCUMENT v3.25.0.1
Income Taxes
 6 Months Ended
Dec. 31, 2024
Income Taxes [Abstract]  
Income Taxes

Note (8) - Income Taxes: Income taxes are recorded in the Company’s quarterly financial statements based on the Company’s estimated annual effective income tax rate, subject to adjustment for discrete events, should they occur.

 

The Company’s effective tax rate was 30.0% and 34.4% for the six and three-month periods ended December 31, 2024, respectively, and 34.0% and 37.0% for the six and three-month periods ended December 31, 2023, respectively. The decreases in the effective tax rate are attributable to a decrease in the net impact of permanent book-tax differences resulting primarily from nondeductible compensation.

 

As of December 31, 2024 and June 30, 2024, the Company had net deferred tax liabilities of approximately $5.5 million. Consistent with the guidance of the FASB regarding accounting for income taxes, the Company regularly estimates its ability to recover deferred tax assets and establishes a valuation allowance against deferred tax assets to reduce the balance to amounts expected to be recoverable. This evaluation includes the consideration of several factors, including an estimate of the likelihood of generating sufficient taxable income in future periods over which temporary differences reverse, the expected reversal of deferred tax liabilities, past and projected taxable income, and available tax planning strategies. As of December 31, 2024, management believed that it was more-likely-than-not that the results of future operations will generate sufficient taxable income to realize the amount of the Company’s deferred tax assets over the periods during which temporary differences reverse.

 

The Company follows ASC Topic 740-10-25, “Accounting for Uncertainty in Income Taxes” (“ASC 740”). ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company’s accounting for income taxes in accordance with this standard did not result in a material adjustment to the Company’s provision for income taxes during the three or six months ended December 31, 2024 or 2023.

 

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act includes the largest-ever U.S. investment committed to combat climate change, allocating $369 billion to energy security and clean energy programs over 10 years, including provisions incentivizing manufacturing of clean energy equipment. Starting on January 1, 2023, the IR Act imposed a 15% alternative minimum tax (AMT) on corporations with book income in excess of $1 billion and a 1% federal excise tax on certain stock repurchases. The Company is not expected to be subject to the new AMT requirements, and the 1% federal excise tax imposed by the IR Act is not expected to have a significant impact on the Company’s financial statements.

 

As of December 31, 2024, the Company was subject to potential federal and state tax examinations for the tax years including and subsequent to 2020.