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16. Income Taxes | 12 Months Ended
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Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Note 16: Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Income tax expense for the years ended September 30, 2018 and 2017 is as follows:
|  | Year Ended |  |  | Year Ended |
|  | September 30, |  |  | September 30, |
|  | 2018 |  |  | 2017 |
Current expense: |  |  |  |  |  |  |  |
Federal |  | $ | (16,621 | ) |  | $ | 313,405 |
State |  |  | 243,631 |  |  |  | 243,841 |
|  |  | 227,010 |  |  |  | 557,246 |
Deferred expense: |  |  |  |  |  |  |  |
Federal |  |  | 3,471,657 |  |  |  | 3,397,732 |
State |  |  | 367,526 |  |  |  | 126,841 |
Change in valuation allowance |  |  | 340,906 |  |  |  | – |
|  |  | 4,180,089 |  |  |  | 3,524,573 |
Total income tax expense |  | $ | 4,407,099 |  |  |  | 4,081,819 |
A reconciliation of the differences between the effective and statutory income tax rates for years ended September 30:
|  | Year Ended |  |  | Year Ended |
|  | September 30, |  |  | September 30, |
|  | 2018 |  |  | 2017 |
Federal statutory rates |  | $ | 2,507,740 |  |  | $ | 3,598,424 |
State income taxes, net of federal benefit |  |  | 340,018 |  |  |  | 299,216 |
Permanent differences |  |  | 67,579 |  |  |  | 71,908 |
Impact of federal rate change from Tax Act |  |  | 3,037,057 |  |  |  | – |
Bargain gain - purchase accounting |  |  | (1,455,598 | ) |  |  | – |
Property & equipment adjustment |  |  | (273,525 | ) |  |  | – |
Federal carryfoward attributes trued up |  |  | (170,731 | ) |  |  | – |
Change in valuation allowance |  |  | 340,906 |  |  |  | – |
Other |  |  | 13,653 |  |  |  | 112,271 |
Effective rate |  | $ | 4,407,099 |  |  | $ | 4,081,819 |
At September 30, deferred income tax assets and liabilities were comprised of:
|  | Year Ended |  |  | Year Ended |
|  | September 30, |  |  | September 30, |
|  | 2018 |  |  | 2017 |
Deferred income tax assets (liabilities): |  |  |  |  |  |  |  |
Allowance for bad debts |  | $ | 229,048 |  |  | $ | 401,867 |
Accrued expenses |  |  | 22,664 |  |  |  | 31,183 |
Inventory |  |  | (8,381 | ) |  |  | 772,656 |
Accrued compensation |  |  | 33,670 |  |  |  | – |
Net operating loss |  |  | 6,050,336 |  |  |  | 7,804,948 |
Tax credits |  |  | 259,026 |  |  |  | 377,776 |
Stock compensation |  |  | 2,252,254 |  |  |  | 2,982,009 |
Intangibles |  |  | (1,387,115 | ) |  |  | 13,126 |
Property & equipment |  |  | (3,890,234 | ) |  |  | (3,387,298 | )
Other |  |  | – |  |  |  | 3,743 |
Less: Valuation allowance |  |  | (340,906 | ) |  |  | – |
Total deferred income tax asset |  | $ | 3,220,362 |  |  | $ | 9,000,010 |
The Company has federal and state net operating loss carryforwards of approximately $26.9 million and $3.7 million respectively as of September 30, 2018. The federal net operating loss amounts are subject to IRS code section 382 limitations and expire in 2030. State net operating loss amounts begin to expire in 2018. Federal and state tax credit carryforwards as of September 30, 2018 are $0.2 million and $0.1 million respectively. Due to the Tax Act, the federal tax credit carryforward is fully refundable in 2021 if not utilized before then. The 2015 through 2017 tax years are open to examination by the various federal and state jurisdictions. The Company evaluates all available evidence to determine if a valuation allowance is needed to reduce its deferred tax assets. Management has concluded that it is more likely than not that a portion of its existing tax benefits will not be realized. Accordingly, the Company has recorded a valuation allowance of $0.3 million at September 30, 2018 to reduce its deferred tax assets. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted. The legislation significantly revises the U.S. corporate income tax system by, among other things, lowering corporate income tax rates from 35% to 21%, introducing new limitations on interest expense, subjecting foreign earnings in excess of an allowable return to U.S. taxation, adopting a territorial tax regime and imposing a one-time transitional tax on deemed repatriated earnings of foreign subsidiaries. As a result of the enactment of the Tax Act, the Company’s deferred tax assets and liabilities were revalued at the lower federal income tax rate. The Company recorded net deferred income tax expense during the year ended September 30, 2018 of approximately $3.0 million. The Company annually conducts an analysis of its tax positions and has concluded that it has no uncertain tax positions as of September 30, 2018. The Company’s policy is to record uncertain tax positions as a component of income tax expense.

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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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