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Income Taxes
 6 Months Ended
Mar. 31, 2022
Income Taxes  
Income Taxes

3. Income Taxes

The Company will continue to assess all available evidence during future periods to evaluate any changes to the realization of its deferred tax assets. If the Company were to determine that it would be able to realize additional state deferred tax assets in the future, it would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

The income tax expense for the three-month period ended March 31, 2022 was $390,110 as compared to an income tax expense of $20,165 for the three-month period ended March 31, 2021.

The effective tax rate for the three-month period ended March 31, 2022 was 21.4% and differs from the statutory tax rate primarily due to permanent items and state taxes.

The effective tax expense rate for the three-month period ended March 31, 2021 was 3.2% and differs from the statutory tax rate primarily due to net operating loss utilization related to the increase in pretax book income. This loss utilization both decreased the deferred tax asset and the valuation allowance. A full valuation allowance exists on all deferred tax assets. For the three months ended March 31, 2021, the valuation allowance decreased by approximately $140,000.

The income tax expense for the six-month period ended March 31, 2022 was $697,600 as compared to an income tax expense of $29,662 for the six-month period ended March 31, 2021.

The effective tax rate for the six-month period ended March 31, 2022 was 21.4% and differs from the statutory tax rate primarily due to permanent items and state taxes.

The effective tax expense rate for the six-month period ended March 31, 2021 was 3.4% and differs from the statutory tax rate primarily due to net operating loss utilization related to the increase in pretax book income. This loss utilization both decreased the deferred tax asset and the valuation allowance. A full valuation allowance exists on all deferred tax assets. For the six months ended March 31, 2021, the valuation allowance decreased by approximately $180,000.