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INCOME TAXES | 12 Months Ended
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Aug. 31, 2023
INCOME TAXES |
INCOME TAXES | NOTE 11 – INCOME TAXES For the year ended August 31, 2023, Pure Cycle recorded income tax expense of $1.5 million, which consisted of current income tax expense of $1.2 million and deferred income tax expense of $0.3 million. The deferred tax expense consists mainly of timing difference between book and tax depreciation of fixed assets. For the year ended August 31, 2022, Pure Cycle recorded income tax expense of $3.1 million, which consisted of current income tax expense of $3.6 million and deferred income tax benefit of $0.5 million. The deferred tax benefit consists mainly of timing difference between book and tax depreciation of fixed assets. During the year ended August 31, 2023, Pure Cycle made Federal and State income tax installments of $3.5 million and $0.9 million. During the year ended August 31, 2022, Pure Cycle made Federal and State income tax installments of $4.4 million and $0.9 million. Deferred income taxes reflect the tax effects of net operating loss carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of August 31 are as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
(In thousands) |  | August 31, 2023 |  | August 31, 2022
Deferred tax assets (liabilities): |  | ​ |  |  | ​ |
Depreciation and depletion | ​ | $ | (2,155) | ​ | $ | (2,061)
Non-qualified stock options | ​ |  | 484 | ​ |  | 568
Accrued compensation | ​ | ​ | 170 | ​ | ​ | 279
Deferred revenues | ​ | ​ | 121 | ​ | ​ | 108
Other | ​ |  | 28 | ​ |  | 31
Net deferred tax liability | ​ | $ | (1,352) | ​ | $ | (1,075)
​ As of August 31, 2023 and 2022, the Company had no liability for unrecognized tax benefits. ​ Income taxes computed using the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following for the fiscal years ended August 31: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended
​ |  | August 31, 2023 |  | August 31, 2022
Expected expense (benefit) from federal taxes at statutory rate of 21% for the years 2023 and 2022 | ​ | $ | 1,306 | ​ | $ | 2,668
State taxes, net of federal benefit | ​ | ​ | 201 | ​ | ​ | 456
Permanent and other differences | ​ | ​ | (57) | ​ | ​ | 4
Stock Compensation | ​ | ​ | 12 | ​ | ​ | 22
Other | ​ | ​ | 59 | ​ | ​ | (64)
Total income tax expense | ​ | $ | 1,521 | ​ | $ | 3,086
​ | ​ | ​ | ​ | ​ | ​ | ​
​ At August 31, 2022 and 2021, the Company had no net operating loss carryforwards available for income tax purposes.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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