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Income Taxes
 9 Months Ended
Mar. 31, 2012
Income Taxes  
Income Taxes

Note 7 — Income Taxes

 

We file a consolidated federal income tax return in the United States and various combined and separate filings in several state and local jurisdictions.

 

There were no unrecognized tax benefits nor any accrued interest or penalties associated with unrecognized tax benefits during the nine months ended March 31, 2012.  We believe that we have appropriate support for the income tax positions taken and to be taken on the Company’s tax returns and that the accruals for tax liabilities are adequate for all open years based on our assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. The Company’s federal and state income tax returns are open to audit under the statute of limitations for the years ending June 30, 2007 through June 30, 2011.

 

The Company recognized income tax expense of $805,989 and $29,416 for the three months ended March 31, 2012 and 2011,  respectively, with corresponding effective rates of  35.4% and 14.7%.  We recognized income tax expense of $2,686,778 in the nine months ended March 31, 2012 compared to an income tax benefit of $227,778 for the nine months ended March 31, 2011.  Effective tax rates for these 2012 and 2011 nine-month periods were 40.0% and 22.7% respectively.

 

Our effective tax rate for any period may differ from the statutory federal rate due to our state income tax liability in Louisiana and due to stock-based compensation expense related to qualified incentive stock option awards (“ISO awards”), both of which create a permanent tax difference for financial reporting, as these types of awards, if certain conditions are met, are not deductible for federal tax purposes.  The effective tax rate for the nine months ended March 31, 2011 was also affected by additional income tax expense recorded in December 2011 in connection with finalizing the Company’s June 30, 2010 income tax returns.