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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Note 11 - Income Taxes Taxes payable consisted of the following at December 31, 2019 and 2018:
|  | 2019 |  |  | 2018 |
Income tax payable - current |  | $ | 22,055 |  |  | $ | 584,874 |
Income tax payable – noncurrent |  | $ | 1,833,286 |  |  | $ | 2,255,094 |
As of December 31, 2019 and 2018, noncurrent tax payable were $1.83 million and $2.26 million, respectively, consisting primarily of an income tax payable of $1.82 million and $2.01 million respectively, arising from a one-time transition tax recognized in the fourth quarter of 2017 on post-1986 foreign unremitted earnings (see below), and unrecognized tax benefit of $0.01 million and $0.16 million, respectively, as ASC 740 specifies that tax positions for which the timing of the ultimate resolution is uncertain should be recognized as long-term liabilities (see Note 2). The (benefit) provision for income taxes on income (loss) from continuing operations consisted of the following:
|  | 2019 |  |  | 2018 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | (187,807 | ) |  | $ | (623,679 | )
State |  |  | 2,400 |  |  |  | 2,400 |
|  |  | (185,407 | ) |  |  | (621,279 | )
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | 194,007 |  |  |  | (41,138 | )
State |  |  | 242,442 |  |  |  | (76,350 | )
|  |  | 436,449 |  |  |  | (117,488 | )
Total provision (benefit) for income taxes |  | $ | 251,042 |  |  | $ | (738,767 | )
The following is a reconciliation of the difference between the actual (benefit) provision for income taxes and the (benefit) provision computed by applying the federal statutory rate on income before income taxes from continuing operations:
|  | 2019 |  |  | 2018 |
Tax at federal statutory rate |  | $ | (1,235,984 | ) |  | $ | 949,384 |
Foreign rate differential |  |  | (2,922 | ) |  |  | 2,922 |
ASC 740-10 uncertain tax position |  |  | (230,322 | ) |  |  | (798,156 | )
Tax exemption |  |  | (388,742 | ) |  |  | (1,148,552 | )
Global Intangible Low-Taxed Income |  |  | 420,444 |  |  |  | 574,510 |
Stock based compensation |  |  | 18,473 |  |  |  | (270,754 | )
Tax Cut and Jobs Act |  |  | - |  |  |  | 30,055 |
Others |  |  | (463,093 | ) |  |  | (78,176 | )
Valuation allowance |  |  | 2,133,188 |  |  |  | - |
Total provision (benefit) for income taxes |  | $ | 251,042 |  |  | $ | (738,767 | )
The following presents the aggregate dollar effects of the Company’s tax exemption from its continuing operations:
|  | 2019 |  |  | 2018 |
Aggregate dollar effect of tax holiday |  | $ | 388,742 |  |  | $ | 1,148,552 |
Deferred Tax Assets and Liabilities Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred taxes are comprised of the following:
|  | 2019 |  |  | 2018 |
Non-Current Deferred Tax Assets: |  |  |  |  |  |  |  |
Accrued liabilities |  | $ | 18,464 |  |  | $ | 108,250 |
Fed & CA amortization |  |  | 24,529 |  |  |  | 26,481 |
Stock compensation |  |  | 189,635 |  |  |  | 129,691 |
ASC 842 – lease liability |  |  | 742,878 |  |  |  | - |
Inventory |  |  | 994,986 |  |  |  | - |
U.S. NOL |  |  | 1,025,078 |  |  |  | 196,430 |
Non-Current Deferred Tax Liabilities: |  |  |  |  |  |  |  |
Prepaid expenses |  |  | - |  |  |  | (3,988 | )
Fed & CA depreciation |  |  | (21,081 | ) |  |  | (20,415 | )
ASC 842- ROU Asset |  |  | (733,555 | ) |  |  | - |
Net Non-Current Deferred Tax Assets before Valuation Allowance |  |  | 2,240,934 |  |  |  | 436,449 |
Less: Valuation Allowance |  |  | (2,240,934 | ) |  |  | - |
Non-Current Deferred Tax Assets, Net: |  |  | - |  |  |  | 436,449 |
Total Deferred Assets, Net: |  | $ | - |  |  | $ | 436,449 |
Nova LifeStyle, Inc. and Diamond Bar are subject to U.S. federal and state income taxes. Nova Furniture BVI was incorporated in the BVI. There is no income tax for a company domiciled in the BVI. Accordingly, the Company’s consolidated financial statements do not present any income tax provision related to the BVI tax jurisdiction where Nova Furniture BVI is domiciled. On April 24, 2013, the Company acquired all outstanding shares of Bright Swallow, which is incorporated in BVI. Generally, there is no income tax for a company domiciled in the BVI. For U.S. Federal income tax purpose, the Company has net operating loss, or NOL carryforwards of approximately $2.66 million and $0 million at December 31, 2019 and 2018, respectively. For U.S. California income tax purpose, the Company has net operating loss, or NOL carryforwards of approximately $6.24 million and $2.81 million, at December 31, 2019 and 2018, respectively. On September 19, 2013, Bright Swallow moved the office from Macau to Hong Kong, which is subject to a 16.5% corporate income tax. Nova Macao is an income tax-exempt entity incorporated and domiciled in Macao. Corporate income tax in Malaysia is calculated at the statutory rate of 24% of the estimated taxable profit for the year ended December 31, 2019.

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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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