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Note 9 - Income Taxes | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | Note 9 - Income Taxes Our income tax provision consists of:
|  | Years Ended December 31, |
|  | 201 7 |  |  | 201 6 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | (70 | )
State |  |  | - |  |  |  | 20 |
Foreign |  |  | 300 |  |  |  | 13 |
|  |  | 300 |  |  |  | (37 | )
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | (1,717 | ) |  |  | 220 |
State |  |  | 55 |  |  |  | - |
Foreign |  |  | (7 | ) |  |  | (85 | )
|  |  | (1,669 | ) |  |  | 135 |
Total income tax provision |  | $ | (1,369 | ) |  | $ | 98 |
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “ Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, ( 1 ) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; ( 2 ) elimination of the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized; ( 3 ) changing rules related to usage and limitation of net operating loss carryforwards created in tax years beginning after December 31, 2017; ( 4 ) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries for tax years beginning after December 31, 2017; and ( 5 ) implementing a territorial tax system and imposing a transition toll tax on deemed repatriated earnings of foreign subsidiaries. The Act reduces the U.S. corporate tax rate to 21 percent, effective January 1, 2018. Deferred tax liabilities associated with goodwill and certain other intangible assets have been reduced by $1,939, resulting in a deferred income tax benefit of $1,939 for the year ended December 31, 2017. The Act pr ovided for a one -time deemed mandatory repatriation for post- 1986 undistributed foreign subsidiary earnings and profits (“E&P”) through the year ended December 31, 2017. The Company had a deficit in foreign E&P and is not expected to be subject to the deemed mandatory repatriation. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (in cluding computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. The Company has recognized the provisional tax impacts related to the revaluation of deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017. As of December 31, 2017, we have completed the majority of our accounting for the tax effects of the Act. If revisions are needed as new information becomes available, the final determination of the deemed re-measurement of our deferred assets and liabilities or other applicable provisions of The Act will be completed as additional information becomes available, but no later than one year from the enactment of the 2017 Tax Act. The deferred U.S. income tax benefit for 2017 primarily represents a one -time, non-cash benefit of $1,939 relating to the revaluation of deferred tax liabilities on goodwill and certain other intangible assets upon the enactment of the Ta x Act, offset by the increase in the deferred tax liability associated with the increase in the taxable temporary difference related to the goodwill and certain other indefinite-lived intangible assets. The deferred income tax provision for 2016 is primarily due to the recognition of deferred tax liabilities relating to goodwill and certain other intangible assets that cannot be predicted to reverse during our loss-carryforward for book purposes partially offset by the deferred tax benefit of the amortization of certain intangible assets of Accutronics (U.K.). The current income tax provision is primarily attributable to the operating income of Accutronics (U.K.). The benefit associated with the current income tax provision in 2016 is primarily related to an excess accrual of income taxes in prior years. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. Significant components of our deferred tax liabilities and assets are as follows:
|  | Years Ended December 31, |
|  | 2017 |  |  | 2016 |
Deferred Tax Liabilities: |  |  |  |  |  |  |  |
Property, Plant and Equipment |  | $ | - |  |  | $ | - |
Other |  |  | 38 |  |  |  | - |
Intangible Assets |  |  | 3,806 |  |  |  | 5,471 |
Total Deferred Tax Liabilities |  |  | 3,844 |  |  |  | 5,471 |
Deferred Tax Assets: |  |  |  |  |  |  |  |
Property, Plant and Equipment |  |  | 44 |  |  |  | 77 |
Net Operating Loss Carryforwards |  |  | 17,870 |  |  |  | 27,127 |
Tax Credit Carryforwards |  |  | 1,837 |  |  |  | 1,704 |
Intangible Assets |  |  | 1,535 |  |  |  | 2,923 |
Accrued Expenses, Reserves and Other |  |  | 1,359 |  |  |  | 1,527 |
Total Deferred Tax Assets |  |  | 22,645 |  |  |  | 33,358 |
Valuation Allowance for Deferred Tax Assets |  |  | (22,636 | ) |  |  | (33,331 | )
Net Deferred Tax Assets |  |  | 9 |  |  |  | 27 |
Net Deferred Tax Liabilities |  | $ | 3,835 |  |  | $ | 5,444 |
Net deferred tax liabilities are comprised of the following balance sheet amounts:
|  | Years Ended December 31, |
|  | 201 7 |  |  | 2016 |
Non-Current Deferred Tax Assets |  | $ | 32 |  |  | $ | 94 |
Non-Current Deferred Tax Liabilities |  |  | (3,867 | ) |  |  | (5,538 | )
|  | $ | (3,835 | ) |  | $ | (5,444 | )
The valuation allowance for deferred tax assets decreased by $10,695 and $1,262 in the years ended December 31, 2017 and 2016, respectively. The decreases in the valuation allowance were due to the reduction of deferred tax assets due to the Company’s pretax income as well as the revaluation of the deferred taxes due to the enactment of the Tax Cuts and Jobs Act . Effective January 1, 2017, the Company adopted ASU 2016 - 09, Compensation - Stock Compensation (Topic 718 ): Improvement to Employee Share-Based Payment Accounting. As a result of the adoption, the Company recognized a gross deferred tax asset of $1,123 and a corresponding valuation allowance in the same amount resulting in no net deferred tax asset recognition. In 2017 and 2016, in the U.S. and for certain past operations in the U.K., we continue to report a valuation allowance for our net operating loss carryforwards and other deferred tax assets that cannot be offset by reversing temporary differences. The rec ognition of the valuation allowance is based on an assessment of all available evidence, both positive and negative, weighted based on objective verifiability. The assessment of the realizability of the U.S. deferred tax assets was based on a number of factors including our history of operating losses, our historical operating volatility, our historical inability to accurately forecast earnings for future periods and the continued uncertainty of the general business climate. The use of our U.K. net operating loss carryforwards may be limited due to the change in the past U.K. operation. Based on our assessment of all available evidence and its weighting based on objective verifiability, we concluded that the realizability of these deferred tax assets is not more likely than not. In both 2017 and 2016, we have not recognized a valuation allowance against our other foreign deferred tax assets as we believe that it is more likely than not that they will be realized. We will continue to evaluate the realizability of our deferred tax assets in future periods. As of December 31, 2017, we have domestic and foreign NOLs totaling $69,594 and $12,760, respectively, and domestic tax credits of approximately $1,837, available to reduce future taxable income. Included in our NOL carryforward are foreign loss carryforwards of approximately $12,760, nearly all of which can be carried forward indefinitely. The domestic NOL carryforward of $69,594 expires beginning in 2019, through 2034. At December 31, 2017, the Company maintains its assertion that all foreign earnings will be indefinitely reinvested in those operations. For financial reporting purposes, income from continuing operations before income taxes is as follows:
|  | Years Ended December 31, |
|  | 201 7 |  |  | 2016 |
United States |  | $ | 4,831 |  |  | $ | 2,803 |
Foreign |  |  | 1,464 |  |  |  | 777 |
|  | $ | 6,295 |  |  | $ | 3,580 |
The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to income (loss) from continuing operations before income taxes as follows:
|  | Years Ended December 31, |
|  | 2017 |  |  | 2016 |
Statutory Income Tax Rate |  |  | 34 | % |  |  | 34.0 | %
(Increase) Decrease in Tax Provision Resulting From: |  |  |  |  |  |  |  |
Equity Compensation |  |  | 0.7 |  |  |  | 9.6 |
Income Tax Credits |  |  | (0.9 | ) |  |  | (6.2 | )
Foreign Tax Rates |  |  | (3.8 | ) |  |  | (2.2 | )
Release of Unrecognized Tax Benefits |  |  | - |  |  |  | - |
Valuation Allowance |  |  | (20.9 | ) |  |  | (30 | )
Excess Accrual |  |  | - |  |  |  | (5.2 | )
Tax Rate Change |  |  | (30.8 | ) |  |  | - |
Other |  |  | (0.1 | ) |  |  | 2.7 |
Effective Income Tax Rate |  |  | (21.8 | )% |  |  | 2.7 | %
Accounting for Uncertainty in Income Taxes There were no unrecognized tax benefits related to uncertain tax positions at December 31, 2017 and 2016. As a result of our operations, we file income tax returns in various jurisdictions including U.S. federal, U.S. state and foreign jurisdictions. We are routinely subject to examination by taxing authorities in these various jurisdictions. Our U.S. tax matters for the years 2002 through 2017 remain subject to examination by the Internal Revenue Service (“IRS”) due to our NOL carryforwards. Our U.S. tax matters for the years 2002 through 2017 remain subject to examination by various state and local tax jurisdictions due to our NOL carryforwards. Our tax matters for the years 2009 through 2017 remain subject to examination by the respective foreign tax jurisdiction authorities.

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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 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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