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INCOME TAXES
 9 Months Ended
Jun. 30, 2012
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

10. INCOME TAXES

 

Income tax expense on continuing operations for the periods presented differs from the “expected” federal income tax expense computed by applying the U.S. federal statutory rate of 34% to earnings before income taxes for the three and nine months ended June 30, as a result of the following:

 

  For the Three Months  For the Nine Months 
  Ended June 30,  Ended June 30, 
  2012  2011  2012  2011 
Computed expected tax expense $993  $1,372  $3,333  $4,241 
State income taxes  70   29   105   59 
Stock option disqualifying dispositions and other permanent differences  (41)  106   (72)  (50)
Total income tax expense $1,022  $1,507  $3,366  $4,250 

 

Included in the Company’s deferred tax liabilities at June 30, 2012 is approximately $15.1 million representing the tax effect of indefinite lived intangible assets from club acquisitions which are not deductible for tax purposes. These deferred tax liabilities will remain in the Company’s balance sheet until the related clubs are sold.

 

The Company recognizes interest accrued in interest expense and penalties in operating expenses. During the nine months ended June 30, 2012 and 2011, the Company recognized approximately $16,000 and $34,000, respectively, in penalties. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states.  The last three years remain open to tax examination.