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Note 6 - Income Taxes | 12 Months Ended
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Dec. 31, 2022
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
6. | INCOME TAXES
The income tax provision from operations consists of the following:
Year ended December 31, (in thousands) |  | 2022 |  |  | 2021 |
Current |  | $ | 5,231 |  |  | $ | 2,951 |
Deferred |  |  | (77 | ) |  |  | (227 | )
Total |  | $ | 5,154 |  |  | $ | 2,724 |
The 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, |  | 2022 |  |  | 2021 |
Statutory rate |  |  | 21 | % |  |  | 21 | %
State and local taxes, net of federal benefit |  |  | 4.7 |  |  |  | 5.8 |
Equity compensation |  |  | - |  |  |  | 0.3 |
Research and development credit |  |  | (1.5 | ) |  |  | (2.6 | )
Foreign tax credit |  |  | (1.3 | ) |  |  | (1.3 | )
GILTI income inclusion |  |  | 3.9 |  |  |  | - |
Other |  |  | 0.3 |  |  |  | - |
Effective rate |  |  | 27.1 | % |  |  | 23.2 | %
Net deferred tax assets (liabilities) consist of the following at December 31:
(in thousands) |  | 2022 |  |  | 2021 |
Deferred tax (liabilities) assets: |  |  |  |  |  |  |  |
Unrealized loss on investments |  | $ | 788 |  |  | $ | 896 |
IRC section 174 costs |  |  | 822 |  |  |  |  |
Foreign Tax Credit |  |  | - |  |  |  | 259 |
Fixed assets |  |  | (1,441 | ) |  |  | (1,335 | )
Other |  |  | (124 | ) |  |  | 148 |
Total deferred tax asset (liability) |  |  | 45 |  |  |  | (32 | )
Less valuation allowance |  |  | (517 | ) |  |  | (517 | )
Net deferred tax liability |  |  | (472 | ) |  | $ | (549 | )
We had net deferred tax liabilities of approximately $0.5 million at December 31, 2022 and December 31, 2021, respectively. The gross deferred tax asset/liability has been offset by a valuation allowance of $0.5 million in 2022 and 2021, because the Company believes that it is more likely than not that the amount will not be realized. 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 (research and development credits) in the past two years. There were no unrecognized tax benefits as of December 31, 2022 and 2021. 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. With few exceptions we are no longer subject to U.S. federal, state and local or foreign income tax examinations by taxing authorities for returns filed more than three years ago.

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