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Note 7 - Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Note 7: Income Taxes Income tax provision reported in the consolidated statements of operations is comprised of the following:
|  | December 31, |
|  | 2014 |  |  | 2013 |
Current provision: |  |  |  |  |  |
Federal |  | $ | (388,864 | ) |  | $ | 583,558 |
State, net of state tax credits |  |  | (28,800 | ) |  |  | 220,896 |
|  |  | (417,664 | ) |  |  | 804,454 |
Deferred provision: |  |  |  |  |  |  |  |
Federal |  |  | 1,403,100 |  |  |  | (482,350 | )
State |  |  | 355,000 |  |  |  | (69,950 | )
|  |  | 1,758,100 |  |  |  | (552,300 | )
Total income tax provision |  | $ | 1,340,436 |  |  | $ | 252,154 |
The following are the components of our net deferred taxes for federal and state income taxes:
|  | December 31, |
|  | 2014 |  |  | 2013 |
Current deferred tax asset: |  |  |  |  |  |
Deferred revenue |  | $ | 776,100 |  |  | $ | 1,064,000 |
Deferred franchise costs |  |  | (253,900 | ) |  |  | (362,800 | )
Allowance for doubtful accounts |  |  | 30,800 |  |  |  | - |
Accrued expenses |  |  | 197,300 |  |  |  | - |
Restricted stock compensation |  |  | (60,700 | ) |  |  | - |
Deferred rent |  |  | 35,500 |  |  |  | - |
Charitable contribution carryover |  |  | 400 |  |  |  | - |
|  |  | 725,500 |  |  |  | 701,200 |
Less valuation allowance |  |  | (516,700 | ) |  |  | - |
Net current deferred tax asset |  | $ | 208,800 |  |  | $ | 701,200 |
Non-current deferred tax asset: |  |  |  |  |  |  |  |
Deferred revenue |  | $ | 2,223,200 |  |  | $ | 1,825,700 |
Deferred franchise costs |  |  | (679,000 | ) |  |  | (469,100 | )
Restricted stock compensation |  |  | (170,600 | ) |  |  | - |
Deferred rent |  |  | 171,500 |  |  |  | - |
Net operating loss carryforwards |  |  | 38,200 |  |  |  | - |
Asset basis difference related to property and equipment |  |  | (45,400 | ) |  |  | (90,900 | )
|  |  | 1,537,900 |  |  |  | 1,265,700 |
Less valuation allowance |  |  | (1,537,900 | ) |  |  | - |
Net non-current deferred tax asset |  | $ | - |  |  | $ | 1,265,700 |
At December 31, 2014, we had state net operating losses of approximately $965,000. These net operating losses are available to offset future taxable income and will begin to expire in 2019. The following is a reconciliation of the statutory federal income tax rate applied to pre-tax accounting net income (loss), compared to the income tax provision in the consolidated statement of operations:
|  | For the Years Ended December 31, |
|  | 2014 |  |  | 2013 |
|  | Amount |  |  | Percent |  |  | Amount |  |  | Percent |
Expected federal tax expense |  | $ | (574,900 | ) |  |  | (34.0 | )% |  | $ | 138,633 |  |  |  | 34.0 | %
State tax provision, net of federal benefit |  |  | (72,500 | ) |  |  | (4.3 | ) |  |  | 18,774 |  |  |  | 4.6 |
Effect of increase in valuation allowance |  |  | 2,054,600 |  |  |  | 121.5 |  |  |  | - |  |  |  | - |
Non-deductible expenses |  |  | 23,900 |  |  |  | 1.4 |  |  |  | 19,831 |  |  |  | 4.9 |
Uncertain tax positions |  |  | (20,900 | ) |  |  | (1.2 | ) |  |  | 85,157 |  |  |  | 20.9 |
Effect of reduced state rates for deferred |  |  | 33,000 |  |  |  | 2.0 |  |  |  | - |  |  |  | - |
Other, net |  |  | (102,764 | ) |  |  | (6.0 | ) |  |  | (10,241 | ) |  |  | (2.5 | )
|  | $ | 1,340,436 |  |  |  | 79.3 | % |  | $ | 252,154 |  |  |  | 61.8 | %
Our state tax expense, penalties and interest stem from uncertain tax positions related to unresolved state apportionment of taxable income. Changes in our income tax expense related primarily to changes in pretax income during the year ended December 31, 2014, as compared to year ended December 31, 2013, and changes in the effective rate from 79.3% to 61.8%, respectively. The difference is due to a valuation allowance on our deferred tax assets, uncertain tax positions that were recorded during the prior period, the reduction in the state income tax rate, and the impact of certain permanent differences on taxable income. For the year ended December 31, 2014 and, 2013, we recorded a liability for income taxes for operations and uncertain tax positions of approximately $122,000 and $148,000, respectively, of which $30,000 and $33,000 respectively, represent penalties and interest and recorded in the “other liabilities” section of the accompanying consolidated balance sheets. Interest and penalties associated with tax positions are recorded in the period assessed as general and administrative expenses. Our tax returns for tax years subject to examination by tax authorities include 2010 and 2011 through the current period for state and federal reporting purposes, respectively. The following table sets forth a reconciliation of the beginning and ending amount of uncertain tax benefits during the tax years ended December 31, 2014 and 2013:
|  | 2014 |  |  | 2013 |
Uncertain tax benefit - January 1 |  | $ | 114,500 |  |  | $ | 29,500 |
Gross decreases - tax positions in prior period |  |  | (22,800 | ) |  |  | - |
Gross increases - tax positions in current period |  |  | - |  |  |  | 85,000 |
Uncertain tax benefit - December 31 |  | $ | 91,700 |  |  | $ | 114,500 |

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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