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Income Taxes | 12 Months Ended
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Jan. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The income tax (benefit) expense for the last two years is reconciled to the statutory federal income tax rates of 21% for the tax years ended January 31, respectively, as follows (in thousands):
| 2021 |  | 2020
Statutory | $ | (625) |  |  | $ | 585 |
State taxes (net of federal tax) | 9 |  |  | 400 |
Change in valuation allowance | (119) |  |  | (573) |
State rate adjustment | (104) |  |  | (291) |
Change in unrecognized tax benefits | (4) |  |  | 20 |
Stock Compensation | 85 |  |  | (28) |
Expirations of attributes | 16 |  |  | 345 |
Permanent differences | 11 |  |  | (17) |
Return to provision | (13) |  |  | (96) |
Income tax (benefit) expense | $ | (744) |  |  | $ | 345 |
Significant components of the (benefit) expense for income taxes attributed to continuing operations are as follows for the years ended January 31 (in thousands):
| 2021 |  | 2020
Current |  |  |
Federal | $ | — |  |  | $ | — |
State | (2) |  |  | 136 |
| (2) |  |  | 136 |
Deferred |  |  |
Federal | (555) |  |  | 442 |
State | (68) |  |  | 340 |
| (623) |  |  | 782 |
Change in valuation allowance | (119) |  |  | (573) |
| (742) |  |  | 209 |
Income tax (benefit) expense | $ | (744) |  |  | $ | 345 |
Deferred tax assets and liabilities are comprised of the following as of January 31 (in thousands):
| 2021 |  | 2020
Deferred tax assets |  |  |
Accrued vacation and sick leave | $ | 835 |  |  | $ | 1,264 |
Retirement plans | 5,657 |  |  | 5,448 |
Insurance reserves | 293 |  |  | 443 |
Warranty | 181 |  |  | 207 |
Net operating loss carryforwards | 4,501 |  |  | 3,658 |
Right of use liabilities | 5,237 |  |  | 6,067 |
Inventory | 1,287 |  |  | 1,175 |
Business interest expense limitation | — |  |  | 224 |
Other | 324 |  |  | 301 |
| $ | 18,315 |  |  | $ | 18,787 |
Deferred tax liabilities |  |  |
Tax in excess of book depreciation | $ | (924) |  |  | $ | (802) |
Right of use assets | (4,541) |  |  | (5,519) |
Other | (70) |  |  | (53) |
| $ | (5,535) |  |  | $ | (6,374) |
Valuation allowance | (1,064) |  |  | (1,183) |
Net long term deferred tax asset | $ | 11,716 |  |  | $ | 11,230 |
In assessing the realizability of deferred tax assets, the Company considers whether it is more-likely-than-not that some portion or all of its deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income or reversal of deferred tax liabilities during the periods in which those temporary differences become deductible. As a part of this evaluation, the Company assesses all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, the availability of tax carrybacks, tax-planning strategies, and results of recent operations (including cumulative losses in recent years), to determine whether sufficient future taxable income will be generated to realize existing deferred tax assets. On the basis of this evaluation, and after considering future reversals of existing taxable temporary differences and the effects of seasonality on the Company’s business, the Company determined that its U.S. federal deferred tax assets are more likely than not to be realizable, but that valuation allowances of $1,064,000 are needed for certain state NOL’s to reduce the carrying amount of deferred tax assets to an amount that is more likely than not to be realized. At January 31, 2021, the Company has net operating loss carryforwards of approximately $12,897,000 for U.S. federal, with no expirations, and $29,891,000 for state income tax purposes, expiring at various dates through January 31, 2039. The following table summarizes the activity related to our gross unrecognized tax benefits for the years ended January 31 (in thousands):
| 2021 |  | 2020
Balances as of February 1, | $ | 60 |  |  | $ | 38 |
Increases related to prior year tax positions | — |  |  | 8 |
Decreases related to prior year tax positions | (4) |  |  | — |
Increases related to current year tax positions | 8 |  |  | 18 |
Decreases related to lapsing of statute of limitations | (10) |  |  | (4) |
Balance as of January 31, | $ | 54 |  |  | $ | 60 |
At January 31, 2021, the Company’s unrecognized tax benefits associated with uncertain tax positions were $54,000, of which $43,000 if recognized, would favorably affect the effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense which is consistent with the recognition of the items in prior reporting. The Company had recorded a liability for interest and penalties related to unrecognized tax benefits of $11,000 at January 31, 2021, and $10,000 at January 31, 2020. The year ended January 31, 2017 and subsequent years remain open for examination by the IRS and state tax authorities. The Company is currently under IRS examination for fiscal year ended January 31, 2016. The Company is not currently under state examinations. The specific timing of when the resolution of each tax position will be reached is uncertain. As of January 31, 2021, it is reasonably possible that unrecognized tax benefits will decrease by $6,000 within the next 12 months due to the expiration of the statute of limitations. On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). The Company has performed an analysis of the impact of the CARES Act and have determined that the impact would not be significant. There were several provisions of the CARES Act that impact Company's fiscal 2020 tax filings, but were not included in the determination of the tax provision due to the date of enactment after January 31, 2020. The CARES Act provides single-employer pension companies additional time to meet the funding obligations. The Company has deferred the timing of funding contributions to a new due date of January 1, 2021. Consequently, the tax deduction related to such contributions will be deferred until the funding payment is made. The CARES Act also modifies the limitation for business interest expense deduction. The new limitation has increased from 30 to 50 percent of adjusted taxable income. As of the issuance of this report, the Company continues to evaluate the impact of the CARES Act.

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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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://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 http://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 http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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