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Note 7 - Income Taxes | 12 Months Ended
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Dec. 31, 2018
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
7. | INCOME TAXES
The income tax provision from operations consists of the following:
Year ended December 31, (in thousands) |  |  |  |  |  |
|  | 201 8 |  |  | 2017 |
Current |  | $ | 284 |  |  | $ | 28 |
Deferred |  |  | (280 | ) |  |  | -- |
Total |  | $ | 4 |  |  | $ | 28 |
Following is a reconciliation of estimated income taxes at the statutory rate from operations to estimated tax expense (benefit) as reported:
Year ended December 31, |  | 201 8 |  |  | 2017 |
Statutory rate |  |  | 21 | % |  |  | 35 | %
Change in valuation allowance |  |  | (21 | %) |  |  | (29 | %)
Effective rate |  |  | -- | % |  |  | 6 | %
Net deferred tax assets consist of the following at December 31:
(in thousands) |  | 2018 |  |  | 2017 |
Deferred tax assets: |  |  |  |  |  |  |  |
Federal, state and foreign loss carryforwards |  | $ | -- |  |  | $ | 794 |
Deferred revenue |  |  | 23 |  |  |  | 11 |
Federal and state tax credits |  |  | 294 |  |  |  | 757 |
Other |  |  | 438 |  |  |  | 402 |
Total deferred tax asset |  |  | 755 |  |  |  | 1,964 |
Less valuation allowance |  |  | (475 | ) |  |  | (1,964 | )
Net deferred tax asset |  | $ | 280 |  |  | $ | -- |
Federal and state tax credits of $294,000 included in the above table expire at various dates between 2033 and 2035. On December 22, 2017, the U.S. federal government enacted the Tax Cuts and Jobs Act of 2017, which, among other provisions, decreases the maximum federal corporate income tax rate from 35% to 21% beginning January 1, 2018. ASC 740, Income Taxes, requires all deferred tax liabilities and assets to be adjusted for the effect of a change in tax rates by including such effect in income from continuing operations in the reporting period that includes the enactment date. In accordance with this guidance, the Company included a charge to tax expense to decrease the deferred tax asset for the year ended December 31, 2017 of approximately $805,000 related to the decrease in the federal corporate income tax rate for future periods. This charge was offset with a change in the valuation allowance recorded related to deferred taxes. We had a deferred tax asset of approximately $0.8 million and $2.0 million at December 31, 2018 and December 31, 2017, respectively. The deferred tax asset has been offset by a valuation allowance in 2018 and 2017 of $0.5 million and $2.0 million, respectively, because the company believes that it is more likely than not that the amount will not be realized. Due to utilization of net operating loss carryforwards and expected future profitability, we concluded that a valuation allowance was no longer needed on certain components of our deferred tax assets. However, we have maintained a valuation allowance on deferred tax assets resulting from unrealized capital losses as we are not able to conclude that is it more likely than not that these will be realized due to the unpredictability of future capital gains. No deferred taxes have been provided on temporary differences related to investments in foreign subsidiaries because these investments are considered to be permanent. We have recognized tax benefits from all tax positions we have taken, and there has been no adjustment to any carry forwards (net operating loss or research and development credits) in the past two years. There were no unrecognized tax benefits as of December 31, 2018 and 2017. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There were no accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the periods presented. We have determined we have no uncertain tax positions. We file a consolidated U.S. federal income tax return for all subsidiaries in which our ownership equals or exceeds 80%, as well as individual subsidiary returns in various states and foreign jurisdictions.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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