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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | 7. Income Taxes The amounts of income tax expense reflected in operations is as follows:
|  | 2024 |  |  | 2023 |
Current: |  |  |  |  |  |
Federal |  | $ | 1,045,995 |  |  | $ | 3,405,403 |
State |  |  | 175,507 |  |  |  | 397,174 |
Foreign |  |  | 537,654 |  |  |  | 544,251 |
Total: |  | $ | 1,759,156 |  |  | $ | 4,346,828 |
Deferred: |  |  |  |  |  |
Federal |  | $ | 480,188 |  |  | $ | 554,763 |
State |  |  | 30,714 |  |  |  | 39,853 |
Total: |  |  | 510,902 |  |  |  | 594,616 |
Total Income Tax Expense: |  | $ | 2,270,058 |  |  | $ | 4,941,444 |
A summary of United States and foreign income before income taxes follows:
|  | 2024 |  |  | 2023 |
United States |  | $ | 9,225,285 |  |  | $ | 18,984,939 |
Foreign |  |  | 3,067,124 |  |  |  | 3,749,665 |
Total: |  | $ | 12,292,409 |  |  | $ | 22,734,604 |
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:
|  | 2024 |  |  | 2023 |
Federal income taxes at 21% statutory rate |  | $ | 2,531,261 |  |  | $ | 4,774,267 |
State and local taxes, net of federal income tax effect |  |  | 144,938 |  |  |  | 612,818 |
Stock options |  |  | (600,969 | ) |  |  | (385,601 | )
Permanent items |  |  | 251,518 |  |  |  | 183,139 |
Foreign tax rate difference |  |  | (56,690 | ) |  |  | (243,179 | )
Provision for income taxes: |  | $ | 2,270,058 |  |  | $ | 4,941,444 |
The following summarizes deferred income tax assets and liabilities:
|  | 2024 |  |  | 2023 |
Deferred income tax liabilities: |  |  |  |  |  |
Property, plant and equipment |  | $ | 2,620,900 |  |  | $ | 2,328,345 |
Intangible assets |  |  | 1,487,297 |  |  |  | 1,336,996 |
Other |  |  | 887,074 |  |  |  | 609,817 |
Total deferred tax liabilities |  |  | 4,995,271 |  |  |  | 4,275,158 |
Deferred income tax assets: |  |  |  |  |  |
Net operating loss carryover |  |  | 915,122 |  |  |  | 930,000 |
Stock compensation |  |  | 2,011,200 |  |  |  | 1,964,332 |
Asset valuations |  |  | 1,317,965 |  |  |  | 852,308 |
Other |  |  | 201,450 |  |  |  | 559,174 |
Total deferred tax assets |  |  | 4,445,737 |  |  |  | 4,305,814 |
Less: valuation allowance |  |  | (915,122 | ) |  |  | (930,000 | )
Total deferred tax assets, net |  |  | 3,530,615 |  |  |  | 3,375,814 |
Net deferred income tax liability: |  | $ | 1,464,656 |  |  | $ | 899,344 |
The gross amount of the net operating loss available as of December 31, 2024 and 2023, with the net operating loss applying to foreign locations, is $3,050,406 and $3,100,000, respectively. These net operating loss carry forwards do not have an expiration date. The Company files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Company is no longer subject to U.S. federal examination for years before 2021, state and local examinations for year before 2020 and foreign examinations before 2021. The Company evaluated its tax positions for each year 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’s evaluation of uncertain tax positions was performed for the tax years ended December 31, 2021 and forward, the tax years which remain subject to examination by major tax jurisdictions as of December 31, 2024. Due to the uncertain nature of the realization of the Company's deferred income tax assets based on past performance of its German subsidiary, 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 $0.9 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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