Note

- Federal, State and Local Income Taxes:

In accordance with the requirements of the Income Tax Topic of the FASB's ASC, the Company's provision for income taxes includes the following:

	Fiscal Years Ended April 30,
($ in thousands)	2019			2018			2017
Current tax expense:
Federal	$	2,964		$	3,853		$	6,360
State and local		600			365			469
Current tax expense		3,564			4,218			6,829
Deferred tax expense (benefit):
Federal		(650	)		(7,021	)		(1,299	)
State and local		1,162			(37	)		(412	)
Deferred tax expense (benefit):		512			(7,058	)		(1,711	)
Income tax provision	$	4,076		$	(2,840	)	$	5,118

December 22, 2017

H.R.

originally known as the Tax Cuts and Jobs Act (the "Tax Act"), was enacted. The Tax Act lowered the U.S. federal income tax rate ("Federal Tax Rate") from

35%

21%

effective

January 1, 2018.

Accordingly, the Company computes Federal income tax expense for the

twelve

months ended

April 30, 2019

using the Federal Tax Rate of

21%,

and computed its income tax expense for the

twelve

months ended

April 30, 2018

using a blended Federal Income tax rate of

30.33%.

The

21%

Federal Tax Rate applies to the full fiscal year ending

April 30, 2019

and each year thereafter.

The overall effective income tax rates, as a percentage of pre-tax ordinary income for the

twelve

months ended

April 30, 2019,

April 30, 2018

and

April 30, 2017

were

26.81%,

(

23.87%

) and

33.05%,

respectively. The overall change in the effective Federal tax rate during the

twelve

months ended

April 30, 2019

and

April 30, 2018

is primarily a result of the reduced Federal Tax Rate. As mentioned above, in fiscal

2018

the U.S. statutory federal corporate income tax rate was reduced from

35%

21%,

which resulted in a tax benefit of

54.51%

of pre-tax income for the

twelve

months ended

April 30, 2018,

primarily attributable to the effect on the long-term deferred tax liability. The Company re-calculated its net deferred tax assets and liabilities using the Federal Tax Rate under the Tax Act and allocated it directly to both current and deferred income tax expenses from continuing operations. In addition, due to evolving state tax legislation, the Company's state and local effective income tax rate, net of Federal income tax benefit, increased from

0.7%

of pretax income for the

twelve

months ended

April 30, 2018,

6.02%

of pretax income for the

twelve

months ended

April 30, 2019.

The fluctuation in the effective income tax rate during fiscal

2017

is primarily attributable to the attribution of

100%

of the gain on the sale of the Company's operating facility to

one

tax jurisdiction.

Deferred income taxes, a liability, are provided for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. The tax effect of temporary differences giving rise to the Company's long-term deferred tax liability are as follows:

	Fiscal Years Ended April 30,
($ in thousands)	2019			2018
Federal tax liability (benefit):
Deferred gain on deconsolidation of EAM	$	10,669		$	10,658
Deferred non-cash post-employment compensation		(372	)		(372	)
Depreciation and amortization		130			119
Unrealized gain on securities held for sale		446			208
Deferred charges		(354	)		(331	)
Other		(279	)		210
Total federal tax liability		10,240			10,492

State and local tax liabilities (benefits):
Deferred gain on deconsolidation of EAM		2,530			1,299
Deferred non-cash post-employment compensation		(74	)		(45	)
Depreciation and amortization		40			15
Other		(112	)		(47	)
Total state and local tax liabilities		2,384			1,222
Deferred tax liability, long-term	$	12,624		$	11,714

The tax effect of temporary differences giving rise to the Company's long-term deferred tax liability is primarily a result of the federal, state and local taxes related to the

$50,805,000

gain from deconsolidation of the Company's asset management and mutual fund distribution subsidiaries, partially offset by the long-term tax benefit related to the non-cash post-employment compensation of

$1,770,000

granted to VLI's former employee.

The Company uses the effective income tax rate determined to provide for income taxes on a year-to-date basis and reflects the tax effect of any tax law changes and certain other discrete events in the period in which they occur.

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory income tax rate to pre-tax income as a result of the following:

	Fiscal Years Ended April 30,
	2019			2018			2017
U.S. statutory federal tax rate		21.00	%		30.33	%		35.00	%
Increase (decrease) in tax rate from:
Effect on deferred tax liabilities from federal tax rate reduction to 21%		-			-54.51	%		-
State and local income taxes, net of federal income tax benefit		6.02	%		0.70	%		-0.88	%
Effect of dividends received deductions		-0.24	%		-0.49	%		-0.33	%
Domestic production tax credit		-			-			-0.17	%
Other, net		0.03	%		0.10	%		-0.57	%
Effective income tax rate		26.81	%		-23.87	%		33.05	%

The Company believes that, as of

April 30, 2019,

there were

material uncertain tax positions that would require disclosure under GAAP.

The Company is included in the consolidated federal income tax return of the Parent. The Company has a tax sharing agreement which requires it to make tax payments to the Parent equal to the Company's liability/(benefit) as if it filed a separate return. Beginning with the fiscal year ended

April 30, 2017,

the Company files combined income tax returns with the Parent on a unitary basis in certain states as a result of changes in state tax regulations. The Company does

not

anticipate any significant tax implications from the change to unitary state tax filing.

The Company’s federal income tax returns (included in the Parent’s consolidated returns) and state and city tax returns for fiscal years ended

2016

through

2018,

are subject to examination by the tax authorities, generally for

three

years after they are filed with the tax authorities. The Company is presently engaged in a federal tax audit for the fiscal year ended

April 30, 2015

and does

not

expect it to have a material effect on the financial statements.