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INCOME TAXES | 12 Months Ended
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Jan. 31, 2014
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | 8. INCOME TAXES The provision for income taxes is based on the following pretax income (loss):
|  | <————————FY 14————————> |  | <————————FY 13————————> |
Domestic and Foreign Pretax Income (Loss) |  | Total |  | Continuing Operations |  | Discontinued Operations |  | Total |  | Continuing Operations |  | Discontinued Operations |
Domestic |  | $ | 1,962,763 |  | $ | 1,962,763 |  | $ | — |  | $ | (11,394,955) |  | $ | (11,394,955) |  | $ | — |
Foreign |  |  | (4,933,655) |  |  | (4,933,655) |  |  | — |  |  | (10,136,243) |  |  | (9,336,243) |  |  | (800,000) |
Total |  | $ | (2,970,892) |  | $ | (2,970,892) |  | $ | — |  | $ | (21,531,198) |  | $ | (20,731,198) |  | $ | (800,000) |
Income Tax Expense (Benefit) |  | Total |  | Continuing Operations |  | Discontinued Operations |  | Total |  | Continuing Operations |  | Discontinued Operations |
Current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 512,202 |  | $ | 512,202 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
State and other taxes |  |  | 39,810 |  |  | 39,810 |  |  | — |  |  | (130,213) |  | $ | (130,213) |  |  | — |
Foreign |  |  | 1,303,875 |  |  | 1,303,875 |  |  | — |  |  | 688,835 |  | $ | 688,835 |  |  | — |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic |  | $ | (162,847) |  | $ | (162,847) |  | $ | — |  | $ | (1,269,245) |  | $ | (990,952) |  | $ | (278,293) |
Valuation allowance-deferred tax asset |  |  | (4,544,431) |  |  | (4,544,431) |  |  | — |  |  | 4,544,431 |  |  | 4,544,431 |  |  | — |
Foreign |  |  | — |  |  | — |  |  | — |  |  | 923,663 |  |  | 923,663 |  |  | — |
Total |  | $ | (2,851,391) |  | $ | (2,851,391) |  | $ | — |  | $ | 4,757,451 |  | $ | 5,035,764 |  | $ | (278,293) |
The following is a reconciliation of the effective income tax rate to the Federal statutory rate:
|  | 2014 |  |  | 2013 |
Statutory rate |  |  | 34.0 | % |  |  | 34.0 | %
State income taxes, net of Federal tax benefit |  |  | (0.88) | % |  |  | 2.5 | %
Goodwill and other intangibles impairment charge |  |  | — |  |  |  | (46.23) | %
Arbitration settlement charge |  |  | — |  |  |  | (12.43) | %
Dividend from sale of Qingdao and from Canada relating to financing |  |  | (17.33) | % |  |  | — |
Brazil losses with no tax benefit |  |  | (69.42) | % |  |  | — |
Permanent differences |  |  | (12.44) | % |  |  | (12.90) | %
Foreign tax rate differential* |  |  | 2.67 | % |  |  | 32.38 | %
Various tax credits |  |  | — |  |  |  | — |
Valuation allowance-deferred tax asset |  |  | 159.38 | % |  |  | (21.11) | %
Other |  |  | — |  |  |  | 1.66 | %
Effective rate |  |  | 95.98 | % |  |  | (22.13) | %
* The foreign rate differential is due to losses in India, Chile and Argentina treated as pass through entities for US tax purposes, the VAT tax charge in Brazil and the elimination of intercompany profit in inventory, all of which serve to reduce the consolidated pretax income. The tax effects of temporary differences which give rise to deferred tax assets at January 31, 2014 and 2013 are summarized as follows:
|  | 2014 |  | 2013 |
Deferred tax assets: |  |  |  |  |  |  |
Inventories |  | $ | 1,545,663 |  | $ | 812,054 |
US tax loss carry-forwards, including work opportunity credit* |  |  | 233,798 |  |  | 1,520,142 |
Accounts receivable and accrued rebates |  |  | 125,159 |  |  | 94,877 |
Accrued compensation and other |  |  | 183,434 |  |  | 184,214 |
India reserves - US deduction |  |  | 613,200 |  |  | 963,524 |
Equity based compensation |  |  | 215,872 |  |  | 218,942 |
Foreign tax credit carry-forward |  |  | 1,243,519 |  |  | 407,092 |
State and local carry-forwards |  |  | 145,528 |  |  | 96,810 |
Depreciation and other |  |  | 299,756 |  |  | 246,776 |
Accrued interest on subordinated debt |  |  | 101,349 |  |  | — |
Deferred tax asset |  |  | 4,707,278 |  |  | 4,544,431 |
Less valuation allowance |  |  | — |  |  | (4,544,431) |
Net deferred tax asset |  | $ | 4,707,278 |  | $ | 0 |
*The federal net operating loss (“NOL”) that is left after FY14 will expire after 1/31/2033 (20 years from the generated date of 1/31/2013). The credits will begin to expire after 1/31/2030 (20 years from the 1st carryover year generated date of 1/31/2010) and will fully expire after 1/31/2033. The state NOLs will begin to expire after 1/31/2025 and will continue to expire at various periods up until 1/31/2033 when they will be fully expired. The states have a larger spread because some only carryforward for 15 years and some allow 20 years. Valuation Allowance We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we considered all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In the event we were to determine that it would not be able to realize deferred income tax assets in the future in excess of net recorded amount, we would make an adjustment to the valuation allowance which would reduce the provision for income taxes. The valuation allowance was $0 at January 31, 2014 ($4,544,431 in 2013). As a result of the going concern uncertainty in FY13, the Company recorded a valuation allowance for the full amount of the deferred tax assets. During FY14, the Company successfully refinanced its long term debt and alleviated substantial doubt of a going concern. As such, the Company believes no allowance is necessary in FY14. Tax Audit Income Tax Audit/Change in Accounting Estimate The Company is subject to US federal income tax, as well as income tax in multiple US state and local jurisdictions and a number of foreign jurisdictions. The Company’s federal income tax returns for the fiscal years ended January 31, 2003, 2004, 2005 and 2007, have been audited by the Internal Revenue Service (“IRS”). The Company has received a final “No Change Letter” from the IRS for FY07 dated August 20, 2009. The Company has received notice from the IRS on March 21, 2011, that it will shortly commence an audit for the FY09 tax return. There have been no further communications from the IRS since. Our three major foreign tax jurisdictions are China, Canada and Brazil. China tax authorities have performed limited reviews on all China subsidiaries as of tax years 2008, 2009, 2010, 2011 and 2012 with no significant issues noted. We believe our tax positions are reasonably stated as of January 31, 2014. On May 9, 2013, one of our China operations was notified by local tax authority that they could conduct an audit on transfer pricing. After preliminary communication with the tax authority, we believe the additional tax liability will be no more than RMB100,000 or US $16,000. At the same time, China tax authority also questioned the retained earnings balance for not being repatriated to corporate which would result in a 10% withholding tax paid to China, and the delayed payment in trade payable from corporate affiliated companies, especially from US parent to China. Additionally, China tax authority also questioned if there is any tax avoidance motive in the investment of US $500,000 to our Argentina subsidiary. We do not believe there will be any material tax consequences from the latter two inquiries. Lakeland Protective Wear, Inc., our Canadian subsidiary, follows Canada tax regulatory framework recording its tax expense and tax deferred assets or liabilities. As of this statement filing date, we believe the Company’s tax situation is reasonably stated, and we do not anticipate future tax liability for fiscal year ended January 31, 2014, or prior years. The Company’s Brazilian subsidiary is currently under a tax audit, which raised some issues regarding the tax impact related to the merger held in 2008 and the resulting goodwill resulting from the structure which was set up by the Company's Brazilian counsel's suggestion. The structure used is relatively common in acquisitions of Brazilian operations made by non-Brazilian companies. In general, acquisitions with this structure have survived challenge by the taxing authorities in Brazil. The cumulative amount of tax benefits recognized on the Company’s books through January 31, 2014, resulting from the tax deduction of the goodwill amortization is approximately US $0, net of the deferred tax valuation reserve. This results from the goodwill on the Brazilian books which, for Brazilian tax purposes, is eligible for tax write-off over a five-year period dating from November 2008. Except in Canada, it is our practice and intention to reinvest the earnings of our non-US subsidiaries in their operations. As of January 31, 2014, the Company had not made a provision for US or additional foreign withholding taxes on approximately $18.0 million of the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration ($16.6 million at January 31, 2013). Generally, such amounts become subject to US taxation upon remittance of dividends and under certain other circumstances. If theses earnings were repatriated to the US, the deferred tax liability associated with these temporary differences would be approximately $3.2 million and $2.9 million at January 31, 2014 and 2013, respectively.

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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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