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INCOME TAXES
 3 Months Ended
Jun. 30, 2022
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 was $173,714 for the three months ended June 30, 2022, and the provision for income taxes was $26,580 for the three months ended June 30, 2021. The Company’s effective tax rate for the three months ended June 30, 2022 was 25.7%. The Company’s effective tax rate to the three months ended June 30, 2021, was approximately 2%, due to the nontaxable PPP loan forgiveness item of $1.3 million disclosed in the condensed consolidated statement of operations.

The valuation allowance on deferred tax assets was approximately $2.0 million at June 30, 2022. We believe that it is more likely than not that the benefit from certain state net operating losses, or NOLs, 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.