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INCOME TAXES
 6 Months Ended
Sep. 30, 2021
INCOME TAXES  
INCOME TAXES

NOTE 5 - INCOME TAXES

The Company accounts for income taxes under ASC 740, Income Taxes. The tax provision for interim periods is determined using the estimated annual effective consolidated tax rate, based on the current estimate of full-year earnings before taxes, adjusted for the impact of discrete quarterly items. The income tax benefit for the three and six months ended September 30, 2021 was $78,462 and $51,882. The Company’s effective tax rate for the three and six months ended September 30, 2021 was 26.3% and 5.0%, respectively. The Company’s effective tax rate for the six months ended September 30, 2021 was lower due to the nontaxable loan forgiveness item of $1.3 million disclosed in the condensed consolidated statement of operations. Income tax expense for the three and six months ended September 30, 2020 was $111,302 and $73,942.

The valuation allowance on deferred tax assets was approximately $1.8 million at September 30, 2021. We believe that it is more likely than not that the benefit from certain state and foreign net operating losses, or NOL, carryforwards and other deferred tax assets will not be realized. In the event future taxable income is below management’s estimates or is generated in tax jurisdictions different than projected, the Company could be required to increase the valuation allowance for deferred tax assets. This would result in an increase in the Company’s effective tax rate.