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Income Taxes
 12 Months Ended
Apr. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") was signed into law, which contains several income tax provisions, as well as other measures, aimed at assisting businesses impacted by the economic effects of the COVID-19 pandemic. The CARES Act includes a broad range of tax reform provisions affecting businesses, including permissible net operating losses ("NOLs") carrybacks up to five years, changes in business deductions limitations, and deferral of Social Security withholdings. The Company expects that it will apply the NOL carryback provision of the CARES Act with respect to its estimated NOL for fiscal year 2021 to years that had higher enacted tax rates, and applied this provision to the NOL for fiscal year 2020, resulting in a tax benefit. The Company also applied the deferral of Social Security withholdings in accordance with the CARES Act; these deferred withholdings are due in future periods.
Effective August 1, 2019, as previously stated, the Company elected to revoke the indefinite reinvestment of foreign unremitted earnings position set forth by ASC 740-30-25-17 for multiple foreign subsidiaries. The Company recorded a tax withholding expense imposed by the India Income Tax Department of $226,000 and $1,964,000 for the years ended April 30, 2021 and 2020, respectively.
The Company's accounting policy with respect to the Global Intangible Low-Taxed Income ("GILTI") tax rules is that GILTI will be treated as a periodic charge in the year in which it arises. The Company had no tax expense related to GILTI for the year ended April 30, 2021.
Income tax expense consisted of the following:
$ in thousands20212020
Current tax expense (benefit):
Federal$(396)$(2,289)
State and local8 49 
Foreign1,136 1,567 
Total current tax expense (benefit)748 (673)
Deferred tax expense (benefit):
Federal449 1,233 
State and local(135)438 
Foreign(72)760 
Total deferred tax expense242 2,431 
Net income tax expense$990 $1,758 
The reasons for the differences between the above net income tax expense and the amounts computed by applying the statutory federal income tax rate to earnings before income taxes are as follows:
$ in thousands20212020
Income tax benefit at statutory rate$(470)$(567)
State and local taxes, net of federal income tax benefit (129)(115)
Tax credits (state, net of federal benefit)(415)(477)
Effects of differing US and foreign tax rates17 3 
Rate reduction impact on deferred tax assets— (47)
Tax on unrepatriated and repatriated foreign earnings226 1,964 
Net operating loss carryback118 (939)
Effect of prior year true ups(42)38 
Impact of foreign subsidiary income (loss) to parent67 (5)
Increase in valuation allowance1,538 1,707 
Other items, net80 196 
Net income tax expense$990 $1,758 
Significant items comprising deferred tax assets and liabilities as of April 30 were as follows:
$ in thousands20212020
Deferred tax assets:
Accrued employee benefit expenses$296 $402 
Allowance for doubtful accounts154 150 
Deferred compensation1,283 890 
Tax credits (state, net of federal benefits)978 532 
Foreign tax credit carryforwards638 638 
Unrecognized actuarial loss, defined benefit plans1,196 2,616 
Inventory reserves69 102 
Net operating loss carryforwards572 457 
Other568 506 
Total deferred tax assets5,754 6,293 
Deferred tax liabilities:
Book basis in excess of tax basis of property, plant and equipment(1,596)(1,545)
Prepaid pension(847)(1,111)
APB 23 Assertion(765)(786)
Other(122)(304)
Total deferred tax liabilities(3,330)(3,746)
Valuation allowance(2,731)(2,612)
Net deferred tax liabilities$(307)$(65)
Deferred tax assets (liabilities) classified in the balance sheet:
Current$— $336 
Non-current(307)(401)
Net deferred tax liabilities$(307)$(65)
At April 30, 2021, the Company had deferred tax assets related to various federal, state and foreign deferred tax items, net operating loss carryforwards, and tax credit carryforwards in the amount of $5,754,000. The Company is required to evaluate the realization of the deferred tax asset and any requirement for a valuation allowance in accordance with ASC 740-10-30-2(b). The Company evaluates all available evidence, both positive and negative, to determine the amount of any required valuation allowance. A deferred tax asset valuation allowance of $2,731,000 was recorded in the period ended April 30, 2021 based on ASC 740-10-30-18. This guidance provides that the future realization of the tax benefit of an existing deductible temporary difference or carryforward ultimately depends on sufficient taxable income of the appropriate character within the carryback or carryforward period available under the tax law.
At April 30, 2021, the Company had federal research and development tax credit carryforwards in the amount of $808,000 expiring beginning in 2041. At April 30, 2021, the Company had foreign tax credit carryforwards in the amount of $638,000, which are subject to a full valuation allowance, beginning to expire in 2028.
At April 30, 2021, the Company had $1,136,000 gross net operating losses in jurisdictions outside of the United States, of which $482,000 is set to expire in years 2022 to 2025. The Company files federal, state and local tax returns with statutes of limitation generally ranging from 3 to 4 years. The Company is generally no longer subject to federal tax examinations for years prior to fiscal year 2017 or state and local tax examinations for years prior to fiscal year 2016. Tax returns filed by the Company's significant foreign subsidiaries are generally subject to statutes of limitations of 3 to 7 years and are generally no longer subject to examination for years prior to fiscal year 2015. The Company has no unrecognized tax benefits.