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Note 7 - Federal, State and Local Income Taxes
 12 Months Ended
Apr. 30, 2021
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
Note
7
- 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)
  
2021
    
2020
    
2019
  
Current tax expense:
                        
Federal
   $
5,407
     $
4,201
     $
2,964
  
State and local
    
1,046
      
1,353
      
600
  
Current tax expense
    
6,453
      
5,554
      
3,564
  
Deferred tax expense (benefit):
                        
Federal
    
859
      
(174
 )    
(422
 )
State and local
    
(316
 )    
328
      
1,162
  
Deferred tax expense (benefit):
    
543
      
154
      
740
  
Income tax provision
   $
6,996
     $
5,708
     $
4,304
  
 
On
December 22, 2017
H.R.
1,
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%
to
21%
effective
January 1, 2018.  
Accordingly, the Company computes Federal income tax expense using the Federal Tax Rate of
21%
in fiscal year
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, 2021,
April 30, 2020
and
April 30, 2019
were
23.11%,
27.64%
and
26.38%,
respectively.  The decrease in the effective tax rate during the
twelve
months ended
April 30, 2021
is primarily a result of a decrease in the state and local income taxes from
6.30%
to
2.05%
as a result of changes in state and local income tax allocations, such as the effect of the reduction in the New York State and New York City tax allocation factors on deferred taxes in fiscal
2021.
  The Company's annualized overall effective tax rate fluctuates due to a number of factors, in addition to changes in tax law, including but
not
limited to an increase or decrease in the ratio of items that do
not
have tax consequences to pre-income tax, the Company's geographic profit mix between tax jurisdictions, taxation method adopted by each locality, new interpretations of existing tax laws and rulings and settlements with tax authorities.   
 
The increase in the effective tax rate during the
twelve
months ended
April 30, 2020
is primarily a result of an increase in the state and local income taxes to
6.30%
as a result of changes in state and  local income tax allocations, such as the effect of the reduction in  the NYC tax allocation factor on deferred taxes in fiscal
2019.
 
 
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)
  
2021
    
2020
  
Federal tax liability (benefit):
                
Deferred gain on deconsolidation of EAM
   $
10,669
     $
10,669
  
Deferred non-cash post-employment compensation
    
(372
 )    
(372
 )
Depreciation and amortization
    
108
      
108
  
Unrealized gain on securities held for sale
    
941
      
299
  
Right of Use Asset
    
(196
 )    
(182
 )
Deferred charges
    
(186
 )    
(166
 )
Other
    
(218
 )    
(207
 )
Total federal tax liability
    
10,746
      
10,149
  
                 
State and local tax liabilities (benefits):
                
Deferred gain on deconsolidation of EAM
    
1,807
      
2,564
  
Deferred non-cash post-employment compensation
    
(63
 )    
(88
 )
Depreciation and amortization
    
18
      
44
  
Unrealized gain on securities held for sale
    
159
      
72
  
Other
    
238
      
110
  
Total state and local tax liabilities
    
2,159
      
2,702
  
Deferred tax liability, long-term
   $
12,905
     $
12,851
  
 
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,
  
   
2021
    
2020
    
2019
  
U.S. statutory federal tax rate
    
21.00
 %    
21.00
 %    
21.00
 %
Increase (decrease) in tax rate from:
                        
State and local income taxes, net of federal income tax benefit
    
2.05
 %    
6.30
 %    
6.02
 %
Effect of dividends received deductions
    
(0.31
 %)    
(0.24
 %)    
(0.24
 %)
Other, net
    
0.37
 %    
0.58
 %    
(0.40
 %)
Effective income tax rate
    
23.11
 %    
27.64
 %    
26.38
 %
 
The Company believes that, as of
April 30, 2021,
there were
no
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's federal income tax returns (included in the Parent's consolidated returns) and state and city tax returns for fiscal years ended
2018
through
2020,
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 New York City tax audit for the fiscal years ended
April 30, 2017
through
2019
and does
not
expect it to have a material effect on the financial statements.