NOTE H - INCOME TAXES

The income tax provision (benefit) charged to continuing operations for the years ended December 31, 2014, 2013, and 2012, was as follows:

	2014			2013			2012

Current:
U.S. federal	$	—		$	—		$	3,947,400
Foreign	1,191,079			949,207			5,313,874
State and local	(142,274		)	205,997			264,269
	1,048,805			1,155,204			9,525,543
Deferred expense (benefit)	(5,745,239		)	(3,308,713		)	359,535
	$	(4,696,434	)	$	(2,153,509	)	$	9,885,078

The components of the Company’s income (loss) before income tax expense attributable to domestic and foreign operations amounted to $(17,774,883) and $3,550,119, respectively, for the year ended December 31, 2014. The components of the Company’s income before income tax expense attributable to domestic and foreign operations amounted to $(12,635,002) and $4,165,452, respectively, for the year ended December 31, 2013. The components of the Company’s income before income tax expense attributable to domestic and foreign operations amounted to $6,018,971 and $19,537,986, respectively, for the year ended December 31, 2012. The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate (34% for 2014, 34% for 2013, and 35% for 2012) to pretax income (loss) from continuing operations for the years ended December 31, 2014, 2013, and 2012, due to the following:

	2014			2013			2012
Computed “expected” tax expense	$	(4,836,420	)	$	(2,879,647	)	$	8,944,935
Increase (decrease) in income taxes resulting from:
Reduction in deferred assets	(281,432		)	—			—
Nondeductible expenses and other	515,923			590,180			768,652
State and local taxes, net of federal benefit	(94,505		)	135,958			171,491
	$	(4,696,434	)	$	(2,153,509	)	$	9,885,078

Net deferred tax liabilities consist of the following components as of December 31, 2014 and 2013:

	2014			2013
Deferred tax assets
Foreign tax credits	$	1,611,329		$	244,898
Net operating loss carry forwards	3,940,285			61,139
Other	199,821			88,911
Total deferred tax assets	5,751,435			394,948
Deferred tax liability
Property, equipment, and intangible asset	(4,596,935		)	(4,985,687		)
Total deferred tax assets (liabilities)	$	1,154,500		$	(4,590,739	)

The components giving rise to the net deferred tax items described above have been included in the accompanying balance sheets as of December 31, 2014 and 2013, as follows:

	2014		2013
Noncurrent assets	$	1,154,500	$	—
Noncurrent (liabilities)	—		(4,590,739		)
	$	1,154,500	$	(4,590,739	)

As of December 31, 2014, the Company has U.S. net operating loss carry forwards for U.S. federal income tax purposes of approximately $12,400,000. These net operating losses are available to offset future federal taxable income, if any, and expire from 2027 through 2034. 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 $1,611,000 expires during the years ranging from 2022-2024.

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 2011 through 2013 are subject to audit by the IRS. The Company’s income tax returns filed in Canada for 2011 through 2013 remain subject to examination by Canadian authorities. As of December 31, 2014 and 2013, the Company had no unrecognized tax benefits within its provision for income taxes.