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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | 7. Income Taxes The amounts of income tax expense reflected in operations is as follows:
|  | 2022 |  |  | 2021 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | 65,263 |  |  | $ | 4,980 |
State |  |  | 192,215 |  |  |  | 153,937 |
Foreign |  |  | 664,766 |  |  |  | 870,739 |
Total: |  | $ | 922,244 |  |  | $ | 1,029,656 |
Deferred: |  |  |  |  |  |  |  |
Federal |  | $ | (238,408 | ) |  | $ | 401,196 |
State |  |  | (56,157 | ) |  |  | 88,403 |
Total: |  |  | (294,565 | ) |  |  | 489,599 |
Total Income Tax Expense: |  | $ | 627,679 |  |  | $ | 1,519,255 |
The current state tax provision was comprised of taxes on income, the minimum capital tax and other franchise taxes related to the jurisdictions in which the Company's facilities are located. A summary of United States and foreign income before income taxes follows:
|  | 2022 |  |  | 2021 |
United States |  | $ | (142,095 | ) |  | $ | 9,721,756 |
Foreign |  |  | 3,804,540 |  |  |  | 5,453,178 |
Total: |  | $ | 3,662,445 |  |  | $ | 15,174,934 |
As discussed in Note 10 below, for segment reporting, direct import sales are included in the United States segment. However, the revenues are earned by our Hong Kong subsidiary and related income taxes are paid in Hong Kong whose rate approximates 16.5%. As such, income of the Asian subsidiary is included in the foreign income before taxes. The following schedule reconciles the amounts of income taxes computed at the United States statutory rates to the actual amounts reported in operations:
|  | 2022 |  |  | 2021 |
Federal income taxes at 21% statutory rate |  | $ | 716,122 |  |  | $ | 2,915,698 |
State and local taxes, net of federal income tax effect |  |  | 120,922 |  |  |  | 115,855 |
Permanent items |  |  | (128,169 | ) |  |  | (1,508,877 | )
Foreign tax rate difference |  |  | (81,196 | ) |  |  | (3,421 | )
Provision for income taxes: |  | $ | 627,679 |  |  | $ | 1,519,255 |
Income tax expense in 2021 included a $1.4 million tax credit for stock-based compensation. The following summarizes deferred income tax assets and liabilities:
|  | 2022 |  |  | 2021 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Property, plant and equipment |  | $ | 2,004,200 |  |  | $ | 1,916,218 |
|  |  | 2,004,200 |  |  |  | 1,916,218 |
Deferred income tax assets: |  |  |  |  |  |  |  |
Asset valuations |  |  | 1,109,954 |  |  |  | 983,055 |
Other |  |  | 588,961 |  |  |  | 333,883 |
|  |  | 1,698,915 |  |  |  | 1,316,938 |
Net deferred income tax liability: |  | $ | 305,285 |  |  | $ | 599,280 |
In 2022, the Company evaluated its tax positions for years which remain subject to examination by major tax jurisdictions, in accordance with the requirements of ASC 740 and as a result, concluded no adjustment was necessary. The Company files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Company’s evaluation of uncertain tax positions was performed for the tax years ended December 31, 2020 and forward, the tax years which remain subject to examination by major tax jurisdictions as of December 31, 2022. Due to the uncertain nature of the realization of the Company's deferred income tax assets based on past performance of its German subsidiary and net loss carry forward expiration dates, the Company has recorded a valuation allowance for the amount of deferred income tax assets which are not expected to be realized. This valuation allowance, all of which is related to deferred tax assets resulting from net operating losses of the Company’s German subsidiary of approximately $3.9 million, is subject to periodic review, and, if the allowance is reduced, the tax benefit will be recorded in future operations as a reduction of the Company's tax expense.

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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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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