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Note 11 - Taxes | 12 Months Ended
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Dec. 31, 2021
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | 11. TAXES We account for income taxes in accordance with the accounting standard for "Income Taxes," which requires an asset and liability approach to financial accounting and reporting for income taxes. Accordingly, deferred income taxes have been provided for the temporary differences between the financial reporting and the income tax basis of the Company’s assets and liabilities by applying enacted statutory tax rates applicable to future years to the basis differences. A breakdown of our income tax expense (benefit) for the years ended December 31 is as follows:
($ in thousands) |  | 2021 |  |  | 2020 |
Federal: |  |  |  |  |  |  |  |
Current |  | $ | 1,554 |  |  | $ | 4,942 |
Deferred |  |  | 1,729 |  |  |  | 67 |
Total Federal |  |  | 3,283 |  |  |  | 5,009 |
State & local: |  |  |  |  |  |  |  |
Current |  |  | 833 |  |  |  | 793 |
Deferred |  |  | (176 | ) |  |  | 97 |
Total State & local |  |  | 657 |  |  |  | 890 |
Foreign |  |  |  |  |  |  |  |
Current |  |  | 907 |  |  |  | 102 |
Deferred |  |  | (37 | ) |  |  | - |
Total Foreign |  |  | 870 |  |  |  | 102 |
Total |  | $ | 4,810 |  |  | $ | 6,001 |
A reconciliation of recorded Federal income tax expense to the expected expense computed by applying the applicable Federal statutory rate for all periods to income before income taxes follows:
|  | Year Ended December 31, |
($ in thousands) |  | 2021 |  |  | 2020 |
Expected expense at statutory rate |  | $ | 5,327 |  |  | $ | 5,662 |
Increase (decrease) in income taxes resulting from: |  |  |  |  |  |  |  |
Exempt income from Dominican Republic operations due to tax holiday |  |  | (1,238 | ) |  |  | (942 | )
Tax Rate Differential effect of Foreign Operations |  |  | 45 |  |  |  | - |
Tax on repatriated earnings from Dominican Republic operations |  |  | 941 |  |  |  | 438 |
State and local income taxes |  |  | 222 |  |  |  | 766 |
Foreign Tax Credit |  |  | (547 | ) |  |  | (30 | )
Meals and entertainment |  |  | 2 |  |  |  | 27 |
Nondeductible penalties |  |  | 3 |  |  |  | 20 |
Provision to return filing adjustments and other |  |  | 55 |  |  |  | 60 |
Total |  | $ | 4,810 |  |  | $ | 6,001 |
Deferred income taxes recorded in the Consolidated Balance Sheets at December 31, 2021 and 2020 consist of the following:
($ in thousands) |  | 2021 |  |  | 2020 |
Deferred tax assets: |  |  |  |  |  |  |  |
Asset valuation allowances and accrued expenses |  | $ | 239 |  |  | $ | 301 |
Inventories |  |  | 1,564 |  |  |  | 528 |
State and local income taxes |  |  | 346 |  |  |  | 169 |
Pension and deferred compensation |  |  | 38 |  |  |  | 18 |
Net operating losses |  |  | 302 |  |  |  | 298 |
Lease asset |  |  | 2,696 |  |  |  | 269 |
Total deferred tax assets |  |  | 5,185 |  |  |  | 1,583 |
Valuation allowances |  |  | - |  |  |  | (298 | )
Total deferred tax assets |  |  | 5,185 |  |  |  | 1,285 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Fixed assets |  |  | 4,144 |  |  |  | 1,571 |
Intangible assets |  |  | 7,179 |  |  |  | 6,587 |
Other assets |  |  | 317 |  |  |  | 278 |
Tollgate tax on Lifestyle earnings |  |  | 228 |  |  |  | 228 |
State and local income taxes |  |  | 1,001 |  |  |  | 623 |
Lease Liability |  |  | 2,609 |  |  |  | 269 |
Total deferred tax liabilities |  |  | 15,478 |  |  |  | 9,556 |
Net deferred tax liability |  | $ | 10,293 |  |  | $ | 8,271 |
The valuation allowance as of December 31, 2020 is related to certain state and local income tax net operating loss carry forwards. We have provided Puerto Rico tollgate taxes on approximately $3,684,000 of accumulated undistributed earnings of Lifestyle prior to the fiscal year ended June 30, 1994, that would be payable if such earnings were repatriated to the United States. In 2001, we received abatement for Puerto Rico tollgate taxes on all earnings subsequent to June 30, 1994, thus no other provision for tollgate tax has been made on earnings after that date. If we repatriate the earnings from Lifestyle, $227,563 of tollgate tax would be due as of December 31, 2021. We are subject to tax examinations in various taxing jurisdictions. The earliest exam years open for examination are as follows:
|  | Earliest Exam Year |
Taxing Authority Jurisdiction: |  |  |
U.S. Federal |  | 2018 |
Various U.S. States |  | 2017 |
Puerto Rico (U.S. Territory) |  | 2016 |
Canada |  | 2016 |
China |  | 2018 |
Mexico |  | 2021 |
United Kingdom |  | 2021 |
Australia |  | 2021 |
Our policy is to accrue interest and penalties on any uncertain tax position as a component of income tax expense. As of December 31, 2021, no such expenses were recognized during the year. We do not believe there will be any material changes in our uncertain tax positions over the next 12 months. Accounting for uncertainty in income taxes requires financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements. Under this guidance, income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of the standard. We did not have any unrecognized tax benefits and there was no effect on our financial condition or results of operations.

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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