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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES

7. INCOME TAXES

 

Income tax expense consisted of the following:

 

   2021   2020   2019 
   December 31, 
   2021   2020   2019 
  

(in thousands)

 
Federal Income Tax:               
Current  $7,197   $5,617   $4,310 
Deferred   264    (175)   (216)
                
State Income Tax:               
Current   1,062    923    748 
Deferred   43    (30)   (36)
                
Foreign Income Tax:               
Current   298    266    607 
Deferred   (2)   (7)   16 
Income Tax Expense  $8,862   $6,594   $5,429 

 

Pre-tax income included foreign income of $1,500,000, $1,341,000, and $3,330,000 in 2021, 2020 and 2019, respectively.

 

 

Total income tax expense differed from statutory income tax expense, computed by applying the U.S. federal income tax rate of 21% to earnings before income tax, as follows:

 

   2021   2020   2019 
   December 31, 
   2021   2020   2019 
  

(in thousands)

 
Computed Statutory Income Tax Expense  $7,362   $5,566   $4,770 
State Income Tax, Net of Federal Tax Benefit   902    759    598 
Foreign Tax Rate Differential   (29)   (27)   (67)
Executive Compensation Limitation   773    503    340 
Foreign Derived Intangible Income Deduction
   (107)   (75)   (76)
Research Credit   (59)   (62)   (141)
Other - Net   20    (70)   5 
Income Tax Expense  $8,862   $6,594   $5,429 

 

A deferred income tax (expense) benefit results from temporary timing differences in the recognition of income and expense for income tax and financial reporting purposes. The components of and changes in the net deferred tax assets (liabilities) which give rise to this deferred income tax (expense) benefit for the years ended December 31, 2021 and 2020 are as follows:

 

   2021   2020 
   December 31, 
   2021   2020 
   (in thousands) 
Deferred Tax Assets:          
Compensation Assets  $130   $124 
Inventory Valuation   334    242 
Accounts Receivable Valuation   329    266 
Deferred Litigation Costs   12    12 
Foreign Net Operating Losses    76    70 
Valuation Allowance for Loss Carryover   (76)   (70)
Other   98    220 
Compensation Liabilities   673    909 
Total Deferred Assets  $1,576   $1,773 
           
Deferred Tax Liabilities:          
Prepaid Expenses   (544)   (481)
Depreciation and Amortization   (1,452)   (1,408)
Total Deferred Liabilities  $(1,996)  $(1,889)
           
Total Deferred Tax Liability  $(420)  $(116)

 

Management believes it is more likely than not that the Company will have sufficient taxable income when these timing differences reverse and that the deferred tax assets will be realized with the exception of a carryover of foreign operating losses. Due to the uncertainty of future income in the foreign subsidiary, the Company has recognized a valuation allowance related to the foreign operating losses carrying forward.

 

The Company is currently subject to audit by the Internal Revenue Service for the calendar years ended 2018 through 2020. The Company and its Subsidiaries’ state income tax returns are subject to audit for the calendar years ended 2017 through 2020.

 

 

As of December 31, 2021, the Company had no liability for unrecognized tax benefits related to various federal and state income tax matters.