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INCOME TAXES | 6 Months Ended
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Mar. 31, 2018
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE L – INCOME TAXES On December 22, 2017, the Company revised its estimated annual effective rate to reflect a change in the United States federal corporate tax rate for the Company from 34% to 21%. The rate change is administratively effective at the beginning of our fiscal year resulting in the use of a blended rate for the annual period. As a result, the blended statutory federal tax rate for the Company’s year ended September 30, 2018 is 24.0%. In addition, we recognized a tax expense in our tax provision for the period ended March 31, 2018 related to the adjustment of our net deferred tax asset to reflect the new corporate tax rate. As a result, income tax expense reported for the six months ended March 31, 2018 was adjusted to reflect the effects of the change in the tax law and resulted in an increase in income tax expense of $182,000. This amount comprises an increase of $306,000 from the application of the newly enacted rates to deferred tax asset balances at the time of enactment and a decrease of $125,000 in income tax expense for the six months ended March 31, 2018 related to the lower federal income tax rate. The Company records income taxes using the asset and liability method. Accordingly, deferred tax assets and liabilities: (i) are recognized for the expected future tax consequences of events that have been recognized in the financial statements or tax returns; (ii) are attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases; and (iii) are measured using enacted tax rates expected to apply in the years when those temporary differences are expected to be recovered or settled. Where applicable, deferred tax assets are reduced by a valuation allowance for any portions determined not likely to be realized. The valuation allowance is assessed by management on a quarterly basis and adjusted, by a charge or credit to income tax expense, as changes in facts and circumstances warrant. In assessing whether it is more likely than not that some portion or all of the deferred tax assets will not be realized, management considers projections of future taxable income, the projected periods in which current temporary differences will be deductible, the availability of carry forwards, feasible and permissible tax planning strategies and existing tax laws and regulations. The Company did not have a valuation allowance against its net deferred tax assets at March 31, 2018 or September 30, 2017. A reconciliation of income tax between the amounts calculated based upon pre-tax income at the Company’s federal statutory rate and the amounts reflected in the consolidated statements of operations are as follows:
|  | For the Three Months |  |  | For the Six Months |
|  | Ended March 31, |  |  | Ended March 31, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
|  | (in thousands) |  |  |  |  |  |  |
Income tax expense at the statutory federal tax rate of 24% |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
for the three and six months ended March 31, 2018 and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
34% for the three and six months ended March 31, 2017 |  | $ | 138 |  |  | $ | 176 |  |  | $ | 352 |  |  | $ | 376 |
State tax expense |  |  | 40 |  |  |  | 32 |  |  |  | 101 |  |  |  | 64 |
Reduction of deferred tax asset from tax legislation |  |  | — |  |  |  | — |  |  |  | 306 |  |  |  | — |
Other |  |  | 4 |  |  |  | 11 |  |  |  | (13 | ) |  |  | 18 |
Income tax expense |  | $ | 182 |  |  | $ | 219 |  |  | $ | 746 |  |  | $ | 458 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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