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Income Taxes | 12 Months Ended
--- | ---
Jun. 30, 2014
Income Tax Disclosure [Abstract] |
Income Taxes |
7. |  | Income Taxes
The provision for (benefit from) income taxes from continuing operations consists of the following amounts (in thousands):
|  | Years Ended June 30,
|  | 2014 |  | 2013
Current: |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | 5 |
State |  |  | 3 |  |  |  | 7 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | (84 | ) |  |  | (41 | )
State |  |  | (23 | ) |  |  | (10 | )
Benefit from income taxes |  | $ | (104 | ) |  | $ | (39 | )
The effective income tax rate on loss from continuing operations differs from the United States statutory income tax rates for the reasons set forth in the table below (in thousands, except percentages).
|  | Years Ended June 30, |
|  | 2014 |  | 2013 |
|  | Amount |  | Percent Pretax Income |  | Amount |  | Percent Pretax Income |
Loss from continuing operations before income taxes |  | $ | (755 | ) |  | 100% |  | $ | (1,903 | ) |  | 100% |
Computed “expected” income tax benefit on loss from continuing operations before income taxes |  | $ | 257 |  |  | 34% |  | $ | 647 |  |  | 34% |
State tax, net of federal benefit |  |  | (10 | ) |  | (1% | ) |  | 130 |  |  | 7% |
Tax incentives |  |  | 30 |  |  | 4% |  |  | 129 |  |  | 7% |
Change in valuation allowance |  |  | (154 | ) |  | (21% | ) |  | (851 | ) |  | (45% | )
Permanent differences |  |  | (31 | ) |  | (4% | ) |  | (29 | ) |  | (2% | )
State income tax rate adjustment |  |  | 12 |  |  | 2% |  |  | 13 |  |  | 1% |
Income tax benefit |  | $ | 104 |  |  | 14% |  | $ | 39 |  |  | 2% |
The total income tax expense recorded for the years ended June 30, 2014 and 2013 was as follows (in thousands):
|  | June 30,
|  | 2014 |  | 2013
Tax benefit from continuing operations |  | $ | (104 | ) |  | $ | (39 | )
Tax expense from discontinued operations |  |  | 107 |  |  |  | 51 |
|  | $ | 3 |  |  | $ | 12 |
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at June 30, 2014 and 2013 are as follows (in thousands):
|  | June 30,
|  | 2014 |  | 2013
Deferred tax assets/(liabilities) – current: |  |  |  |  |  |  |  |
Accrued expenses |  | $ | 253 |  |  | $ | 206 |
Inventory |  |  | 486 |  |  |  | 504 |
Net operating losses |  |  | 119 |  |  |  | — |
State taxes |  |  | 1 |  |  |  | 2 |
Less: valuation allowance |  |  | (744 | ) |  |  | (653 | )
Net deferred tax assets |  | $ | 115 |  |  | $ | 59 |
|  | June 30,
|  | 2014 |  | 2013
Deferred tax assets/(liabilities) – non-current: |  |  |  |  |  |  |  |
Income tax credit carry forwards |  | $ | 1,443 |  |  | $ | 1,381 |
Net operating losses |  |  | 1,299 |  |  |  | 1,092 |
Intangible assets |  |  | 287 |  |  |  | 350 |
Deferred rent |  |  | 132 |  |  |  | 149 |
State taxes |  |  | 16 |  |  |  | 16 |
Property and equipment, principally due to differing depreciation methods |  |  | (458 | ) |  |  | (291 | )
Share based compensation |  |  | 16 |  |  |  | 32 |
Unrealized gain on investment |  |  | (85 | ) |  |  | (2 | )
Total gross deferred tax assets |  |  | 2,650 |  |  |  | 2,727 |
Less: valuation allowance |  |  | (2,765 | ) |  |  | (2,786 | )
Net deferred tax liabilities |  | $ | (115 | ) |  | $ | (59 | )
We have federal net operating loss carry forwards at June 30, 2014 and 2013 in the amount of $2,556,000 and $1,701,000, respectively, which begin to expire in 2034. State net operating loss carry forwards at June 30, 2014 and 2013 amount to $6,339,000 and $6,134,000, respectively, and begin to expire in 2025. Federal tax credit carry forwards at June 30, 2014 and 2013 amount to $884,000 and $867,000, respectively, and begin to expire in 2027. State tax credit carry forwards at June 30, 2014 and 2013 amount to $559,000 and $514,000, respectively, the majority of which do not expire. Significant management judgment is required in determining our provision for income taxes and the recoverability of our deferred tax asset. Such determination is based primarily on our historical taxable income, with some consideration given to our estimates of future taxable income by jurisdictions in which we operate and the period over which our deferred tax assets will be recoverable. Due to cumulative taxable losses in recent years, we have maintained a full valuation allowance against our deferred tax assets at June 30, 2014 and 2013, information related to which is as follows (in thousands):
|  |  | Valuation Allowance |  |
Balance at July 1, 2013 |  | $ | (3,439 | )
Increase in deferred tax asset valuation allowance |  |  | (70 | )
Balance at January 31, 2014 |  | $ | (3,509 | )
As of June 30, 2014, we have accrued $363,000 of unrecognized tax benefits related to federal and state income tax matters. The amount that would reduce the Company’s income tax expense if recognized and result in a corresponding decrease in the Company’s effective tax rate is $47,000. Information with respect to our accrual for unrecognized tax benefits is as follows (in thousands):
Balance at July 1, 2013 |  | $ | 347 |
Additions based on tax positions related to the current year |  |  | 21 |
Reductions for tax positions of prior years |  |  | (5 | )
Balance at June 30, 2014 |  | $ | 363 |
We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense when applicable. As of June 30, 2014, no interest or penalties applicable to our unrecognized tax benefits have been accrued since we have sufficient tax attributes available to fully offset any potential assessment of additional tax. We are subject to U.S. federal income tax, as well as income tax of multiple state tax jurisdictions. We are currently open to audit under the statute of limitations by the Internal Revenue Service for the years ended June 30, 2011 and later. Our state income tax returns are open to audit under the statute of limitations for the years ended June 30, 2010 and later. We do not anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months.

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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 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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