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Income Taxes | 12 Months Ended
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Apr. 30, 2023
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 applied 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. The Company also applied the deferral of Social Security withholdings in accordance with the CARES Act; 50% of these deferred withholdings were due and paid by December 31, 2021, with the remainder due and paid by December 31, 2022. Effective August 1, 2019, 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. As a result of this election, the Company recorded a tax withholding expense imposed by the India Income Tax Department of $406,000 and $240,000 for the years ended April 30, 2023 and 2022, respectively. On December 22, 2017, the Tax Cuts and Job Act amended Internal Revenue Code Section 174, effective for tax years beginning after December 31, 2021. This amendment to Section 174, effective during fiscal year 2023 for the Company, eliminated the current year deductibility of research and experimentation expenditures and required the Company to deduct these expenditures over five years. The impact of this tax regulation required the Company to record a new deferred tax asset of $1,558,000 as of April 30, 2023. 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. Income tax expense consisted of the following:
$ in thousands |  | 2023 |  | 2022
Current tax expense: |  |  |  |
Federal |  | $ | 691 |  |  | $ | 1,899 |
State and local |  | 197 |  |  | 490 |
Foreign |  | 1,736 |  |  | 1,008 |
Total current tax expense |  | 2,624 |  |  | 3,397 |
Deferred tax expense: |  |  |  |
Federal |  | — |  |  | — |
State and local |  | — |  |  | — |
Foreign |  | 515 |  |  | 121 |
Total deferred tax expense |  | 515 |  |  | 121 |
Net income tax expense |  | $ | 3,139 |  |  | $ | 3,518 |
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 thousands |  | 2023 |  | 2022
Income tax expense (benefit) at statutory rate |  | $ | 945 |  |  | $ | (432) |
State and local taxes, net of federal income tax benefit |  | (119) |  |  | (29) |
Tax credits (state, net of federal benefit) |  | (433) |  |  | (457) |
Effects of differing US and foreign tax rates |  | 260 |  |  | 22 |
Net operating loss adjustment |  | — |  |  | (286) |
Return to provision adjustment |  | 413 |  |  | — |
Impact of foreign subsidiary income to parent |  | 99 |  |  | 74 |
Increase in valuation allowance |  | 1,667 |  |  | 4,170 |
Other items, net |  | 307 |  |  | 456 |
Net income tax expense |  | $ | 3,139 |  |  | $ | 3,518 |
Significant items comprising deferred tax assets and liabilities as of April 30 were as follows:
$ in thousands |  | 2023 |  | 2022
Deferred tax assets: |  |  |  |
Accrued employee benefit expenses |  | $ | 153 |  |  | $ | 228 |
Allowance for doubtful accounts |  | 114 |  |  | 142 |
Deferred compensation |  | 1,156 |  |  | 1,196 |
Tax credits (state, net of federal benefits) |  | 170 |  |  | 170 |
Foreign tax credit carryforwards |  | 638 |  |  | 638 |
Section 174 R&E Addback |  | 1,558 |  |  | — |
Unrecognized actuarial loss, defined benefit plans |  | 1,064 |  |  | 1,202 |
Inventory reserves and capitalized costs |  | 201 |  |  | 110 |
Net operating loss carryforwards |  | 249 |  |  | 112 |
Proceeds on Sale Leaseback |  | 6,963 |  |  | 7,215 |
Operating lease liabilities |  | 1,558 |  |  | — |
Other |  | 254 |  |  | 449 |
Total deferred tax assets |  | 14,078 |  |  | 11,462 |
Deferred tax liabilities: |  |  |  |
Book basis in excess of tax basis of property, plant and equipment |  | (1,417) |  |  | (1,758) |
Book basis in excess of tax basis of Sale Leaseback property |  | (1,106) |  |  | (1,122) |
Prepaid pension |  | (919) |  |  | (949) |
APB 23 Assertion |  | (1,318) |  |  | (976) |
Right of use assets |  | (1,526) |  |  | — |
Debt Issuance Cost on Sale Leaseback |  | (167) |  |  | (184) |
Total deferred tax liabilities |  | (6,453) |  |  | (4,989) |
Valuation allowance |  | (8,568) |  |  | (6,901) |
Net deferred tax liabilities |  | $ | (943) |  |  | $ | (428) |
Deferred tax assets (liabilities) classified in the balance sheet: |  |  |  |
Non-current |  | (943) |  |  | (428) |
Net deferred tax liabilities |  | $ | (943) |  |  | $ | (428) |
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). 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. The Company evaluates all available evidence, both positive and negative, to determine the amount of any required valuation allowance. The valuation allowance totaled $8,568,000 and $6,901,000 at April 30, 2023 and 2022, respectively. At April 30, 2023, the Company had foreign tax credit carryforwards in the amount of $638,000, which are subject to a full valuation allowance, and which will begin to expire in 2028. 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 2019 or state and local tax examinations for years prior to fiscal year 2018. 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 2017. The Company has no unrecognized tax benefits.

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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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://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 https://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 https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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