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Note 12 - Income Taxes
 12 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

(12)

Income Taxes

 

As of the end of each of fiscal years 2023 and 2022, the Company’s gross liability for unrecognized tax benefits related to uncertain tax positions was $0.4 million and $0.4 million, respectively. If the tax benefits of such amounts were recognized, $0.3 million and $0.3 million of such amounts, respectively, would decrease the Company’s effective income tax rate. The Company’s net liability for accrued interest and penalties was $0.3 million as of each of September 30, 2023, and September 30, 2022. The Company has elected to recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. During the years ended September 30, 2023, and September 30, 2022, the Company recognized approximately $0.05 million and $0.02 million in interest and penalties, respectively.

 

The Company’s activity was as follows:

 

  

Fiscal Years Ended September 30,

 
  

2023

  

2022

 
  

(In thousands)

 
         

Beginning year balance

 $353  $608 

Decrease related to prior year tax positions

  -   (255)

Ending year balance

 $353  $353 

 

The total amount of unrecognized tax benefits can change due to final regulations, audit settlements, tax examinations activities, lapse of applicable statutes of limitations, and the recognition and measurement criteria under the guidance related to accounting for uncertainly in income taxes. The Company is unable to estimate what this change could be within the next 12 months, but does not believe it would be material to its financial statements.

 

The Company’s income tax expense was as follows:

 

  

Fiscal Years Ended September 30,

 
  

2023

  

2022

 
  

(In thousands)

 

Current

        

Federal

 $485  $854 

State

  221   (149)

Total Current

  706   705 

Deferred

        

Federal

  955   888 

State

  168   163 

Total Deferred

  1,123   1,051 

Total

 $1,829  $1,756 

 

The principal reasons for the differences from the federal statutory income tax rate and the Company’s effective tax rate were as follows:

 

  

Fiscal Years Ended September 30,

 
  

2023

  

2022

 

Federal statutory income tax rate

  21.0

%

  21.0

%

State income taxes, net of federal benefit

  4.0   3.9 

Permanent and other differences

  (0.4)  0.4 

Difference due to executive compensation

  0.7   1.0 

Tax return to provision adjustments

  0.8   (1.3)

Uncertain tax position

  0.9   (3.0)

Stock-based compensation

  0.7   0.1 

Effective income tax rate

  27.7

%

  22.1

%

 

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities were as follows:

 

  

Fiscal Years Ended September 30,

 
  

2023

  

2022

 
  

(In thousands)

 

Deferred tax assets

        

Accrued compensation

 $37  $40 

Stock compensation

  18   20 

State taxes

  176   175 

Capital loss carryforward

  7   7 

Lease liability

  70   (1)

Gross deferred tax assets

  308   241 

Disallowed capital loss

  (7)  (7)

Net deferred tax assets

  301   234 

Deferred tax liabilities

        

Property and equipment

  (31)  (35)

Management contracts

  (14,807)  (13,687)

ROU asset

  (74)  - 

Total deferred tax liabilities

  (14,912)  (13,722)

Net deferred tax liabilities

 $(14,611) $(13,488)