XML 29 R14.htm IDEA: XBRL DOCUMENT
v3.20.4

INCOME TAXES | 12 Months Ended
--- | ---
Sep. 30, 2020
INCOME TAXES |
INCOME TAXES | 8. INCOME TAXES Significant components of our deferred tax assets and liabilities are as follows:
|  | As of September 30,
|  | 2020 |  | 2019
Deferred tax assets: |  |  |  |  |  |
Inventory |  | $ | 85 |  | $ | 102
Accrued compensation and vacation |  |  | 137 |  |  | 162
Accrued expenses and other |  |  | 172 |  |  | 379
Domestic net operating loss carryforwards |  |  | 3,580 |  |  | 3,282
Basis difference for intangible assets |  |  | 457 |  |  | 254
Stock compensation expense |  |  | 96 |  |  | 2
AMT credit carryover |  |  | — |  |  | 31
Leases |  |  | 108 |  |  | —
PPP loan expenses |  |  | 1,276 |  |  | —
Total deferred tax assets |  |  | 5,911 |  |  | 4,212
Deferred tax liabilities: |  |  |  |  |  |
Prepaid expenses |  |  | (143) |  |  | (121)
Basis difference for fixed assets |  |  | (211) |  |  | (219)
Goodwill |  |  | (141) |  |  | —
Total deferred tax liabilities |  |  | (495) |  |  | (340)
Total net deferred tax assets |  |  | 5,416 |  |  | 3,872
Valuation allowance for net deferred tax assets |  |  | (5,557) |  |  | (3,841)
Net deferred tax asset (liability) |  | $ | (141) |  | $ | 31
Significant components of the provision (benefit) for income taxes are as follows as of the year ended September 30:
|  | 2020 |  | 2019
Current: |  |  |  |  |  |
Federal |  | $ | (31) |  | $ | (31)
State and local |  |  | 6 |  |  | 4
Deferred: |  |  |  |  |  |
Federal |  |  | 143 |  |  | 31
State and local |  |  | 29 |  |  | —
Income tax expense |  | $ | 147 |  | $ | 4
The effective income tax rate on continuing operations varied from the statutory federal income tax rate as follows:
|  | 2020 |  | 2019 |
Federal statutory income tax rate |  | 21.0 | % | 21.0 | %
Increases (decreases): |  |  |  |  |
State and local income taxes, net of Federal tax benefit, if applicable |  | (0.1) | % | (0.4) | %
Other nondeductible expenses |  | 1.3 | % | (11.5) | %
Goodwill |  | (3.1) | % | — |
Valuation allowance changes |  | (22.3) | % | (9.6) | %
Effective income tax rate |  | (3.2) | % | (0.5) | %
The Company has indefinite-lived intangible assets related to goodwill. These intangible assets are not amortized for financial reporting purposes; however, they are tax deductible and therefore amortized over 15 years for tax purposes. As such, deferred income tax expense and a deferred tax liability arise as a result of the tax deductibility of the assets. The resulting deferred tax liability, which will continue to increase over time, will have an indefinite life and could remain on the Company’s balance sheet permanently unless there is impairment of the related assets (for financial reporting purposes), or the business to which those assets relate are disposed of. The reversal of the deferred tax liability related to the indefinite-lived goodwill cannot be determined or considered a source of income for valuation allowance purposes. Therefore, the result is a valuation allowance in excess of net deferred tax assets and a net credit balance (“naked credit” deferred tax liability). Realization of deferred tax assets associated with the net operating loss carryforward and credit carryforward is dependent upon generating sufficient taxable income prior to their expiration. The valuation allowance in fiscal 2020 and 2019 was $5,557 and $3,841, respectively for our domestic operations. Payments made in fiscal 2020 and 2019 for income taxes amounted to $7 and $7, respectively. At September 30, 2020, the Company had domestic net operating loss carryforwards for federal tax purposes of $11,859, which expire from September 30, 2032 through 2036. State and local loss carryforwards total approximately $22,506. The majority expire from September 30, 2028 through 2038; however, approximately $465 may be carried forward indefinitely, as they relate to states conforming to the provisions of the Tax Cuts and Jobs Act which allowed for an indefinite carryforward period of losses generated after December 31, 2017. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon regulatory examination based on the technical merits of the position. The amount of the benefit for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that we believe is more likely than not to be realized upon ultimate settlement of the position. There have been no additional gross uncertain tax positions during fiscal 2020 based on any federal or state tax position. The Company is no longer subject to U.S. Federal tax examinations for years before 2016 or state and local for years before 2015, with limited exceptions. For federal purposes, the tax attributes carried forward could be adjusted through the examination process and are subject to examination 3 years from the date of utilization. The Company has assessed the application of Internal Revenue Code Section 382 regarding certain limitations on the future usage of net operating losses. No limitation applies as of September 30, 2020 and we will continue to monitor activities in the future. On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, due to the coronavirus pandemic. Among other things, the legislation provides tax relief for businesses. The Company is still assessing the tax benefit, if any, that it could receive under this legislation. The Company received a PPP loan of $5,051 and applied for forgiveness of $4,851. Based on satisfaction of requirements under the CARES Act for forgiveness, the Company has recorded a deferred tax asset for nondeductible expense relating to the PPP funds of $1,276.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration