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INCOME TAXES | 12 Months Ended
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Sep. 30, 2020
INCOME TAXES |
INCOME TAXES | 9. INCOME TAXES: The components of income tax expense from operations for fiscal 2020 and fiscal 2019 consisted of the following:
|  | 2020 |  | 2019
Current: Federal |  | $ | 1,690,956 |  | $ | 1,139,927
Current: State |  |  | 468,842 |  |  | 428,501
|  |  | 2,159,798 |  |  | 1,568,428
Deferred: Federal |  |  | (14,270) |  |  | 34,466
Deferred: State |  |  | (2,528) |  |  | 6,106
|  |  | (16,798) |  |  | 40,572
Income tax expense |  | $ | 2,143,000 |  | $ | 1,609,000
The difference between the Company’s income tax expense in the accompanying consolidated financial statements and that which would be calculated using the statutory income tax rate of 21% for both fiscal 2020 and fiscal 2019 on income before income taxes is as follows:
|  | 2020 |  | 2019
Tax at statutory rate |  | $ | 1,575,422 |  | $ | 1,010,517
Nondeductible business expenses |  |  | 230,571 |  |  | 226,670
State income taxes, net of federal tax benefit |  |  | 376,262 |  |  | 332,931
Other |  |  | (39,255) |  |  | 38,882
|  | $ | 2,143,000 |  | $ | 1,609,000
Temporary differences between the financial statement carrying balances and tax basis of assets and liabilities giving rise to net deferred tax assets (liabilities) at September 2020 and September 2019 relates to the following:
|  | 2020 |  | 2019
Deferred tax assets: |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | 210,734 |  | $ | 215,925
Accrued expenses |  |  | 1,243,132 |  |  | 796,542
Inventory |  |  | 365,417 |  |  | 452,192
Intangible assets |  |  | 15,803 |  |  | 71,849
Other |  |  | — |  |  | 23,237
Net operating loss carry forwards - federal |  |  | 35,545 |  |  | 63,983
Net operating loss carry forwards - state |  |  | 716,241 |  |  | 723,306
Total gross deferred tax assets |  |  | 2,586,872 |  |  | 2,347,034
Less: Valuation allowance |  |  | (716,241) |  |  | (723,306)
Total net deferred tax assets |  |  | 1,870,631 |  |  | 1,623,728
Deferred tax liabilities: |  |  |  |  |  |
Trade discounts |  |  | 318,070 |  |  | 375,172
Property and equipment |  |  | 2,437,337 |  |  | 2,150,130
Goodwill |  |  | 921,799 |  |  | 921,799
Total deferred tax liabilities |  |  | 3,677,206 |  |  | 3,447,101
Total net deferred income tax liability |  | $ | 1,806,575 |  | $ | 1,823,373
At September 2020, the Company had noncurrent deferred tax assets related to federal net operating loss carryforwards in an amount less than $0.1 million. These federal net operating loss carryforwards totaled approximately $0.2 million and were primarily attributable to the Company’s fiscal 2002 purchase of Hawaiian Natural Water Company, Inc. (“HNWC”), a wholly owned subsidiary of the Company. The utilization of HNWC’s net operating losses is limited by Internal Revenue Code Section 382 to approximately $0.1 million per year through 2022. The Company had a valuation allowance of approximately $0.7 million at both September 2020 and September 2019, against certain state net operating losses, which more likely than not will not be utilized. The Company had no material unrecognized tax benefits, interest, or penalties during fiscal 2020 or fiscal 2019, and the Company does not anticipate any such items during the next twelve months. The Company’s policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Operations. The Company files income tax returns in the U.S. and various states and the tax years 2017 and forward remain open under U.S. and state statutes. During fiscal 2020, the U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act is an emergency economic stimulus package in response to the coronavirus outbreak which, among other things, contains numerous income tax provisions. The Company evaluated the impact of the legislation and determined that while there was an impact on the timing of certain future tax payments, there is no material impact on the Company’s consolidated financial statements or related disclosures.

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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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