NOTE I - INCOME TAXES

The income tax provision charged to continuing operations for the years ended December 31, 2011, 2010, and 2009, was as follows:

	2011		2010			2009

Current:
U.S. federal	$	35,561	$	(190,869	)	$	774,429
Foreign	3,343,374		250,190			142,358
State and local	698,362		374,029			373,151
	4,077,297		433,350			1,289,938

Deferred expense (benefit)	2,469,953		146,550			717,873
	$	6,547,250	$	579,900		$	2,007,811

The components of the Company’s income before income tax expense attributable to domestic and foreign operations amounted to $6,085,192 and $11,295,273, respectively, for the year ended December 31, 2011. The components of the Company’s loss before income tax expense attributable to domestic and foreign operations amounted to $(3,002,790) and $2,360,008, respectively, for the year ended December 31, 2010. The components of the Company’s income before income tax expense attributable to domestic and foreign operations amounted to $3,344,531 and $542,899, respectively, for the year ended December, 2009. The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income (loss) from continuing operations for the years ended December 31, 2011, 2010, and 2009, due to the following:

	2011			2010			2009
Computed “expected” tax expense	$	5,909,358		$	(218,546	)	$	1,321,726
Increase (decrease) in income taxes resulting from:
Change in effective rates used for deferred taxes	(503,693		)	—			—
Nondeductible expenses and other	534,742			548,943			407,168
State and local taxes, net of federal benefit	606,843			249,503			278,917
	$	6,547,250		$	579,900		$	2,007,811

Net deferred tax liabilities consist of the following components as of December 31, 2011 and 2010:

	2011			2010
Deferred tax assets
Foreign tax credits	$	2,034,130		$	250,190
Net operating loss carry forwards	776,647			933,537
Other	—			4,369
Total deferred tax assets	2,810,777			1,188,096
Deferred tax liability
Property, equipment, and intangible asset	(10,068,353		)	(5,975,719		)
Total deferred tax liabilities	$	(7,257,576	)	$	(4,787,623	)

The components giving rise to the net deferred tax items described above have been included in the accompanying balance sheets as of December 31, 2011 and 2010, as follows:

	2011			2010

Current assets	$	—		$	—
Noncurrent (liabilities)	(7,257,576		)	(4,787,623		)
	$	(7,257,576	)	$	(4,787,623	)

As of December 31, 2011, the Company has U.S. net operating loss carry forwards for U.S. federal income tax purposes of approximately $2.3 million. These net operating losses are available to offset future federal taxable income, if any, and expire from 2027 through 2030. The amount of net operating loss carry forwards that may reduce federal income taxes in any given year are subject to annual limitations and taxable income requirements. The foreign tax credit of $2,034,130 expires in 2020.

The Company files a U.S. consolidated federal income tax return for operating activities in the U.S. and Canada. The Company also files federal and local tax returns in Canada, as well as state tax returns in a number of state and local jurisdictions in the U.S. The Company’s U.S. federal income tax returns filed for 2008 through 2010 are subject to audit by the IRS. The Company’s income tax returns filed in Canada for 2008 through 2010 remain subject to examination by Canadian authorities. As of December 31, 2011 and 2010, the Company had no unrecognized tax benefits within its provision for income taxes.