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Income Taxes
 12 Months Ended
Dec. 31, 2012
Income Taxes [Abstract]  
INCOME TAXES

(8) INCOME TAXES

Income tax expense consists of the following for the years ended December 31, 2012 and 2011:

 

                 
    2012     2011  

Current tax expense:

                

Federal

   $ 784     $ 1,253  

State

     117       97  

Penalties and interest

     55       25  
   

 

 

    

 

 

  
      956       1,375  
   

 

 

    

 

 

  

Deferred tax benefit:

                

Federal

     (156 )      (271 ) 

State

     (12 )      (24 ) 
   

 

 

    

 

 

  
      (168 )      (295 ) 
   

 

 

    

 

 

  
    $ 788     $ 1,080  
   

 

 

    

 

 

  

A reconciliation of income tax computed at the U.S. statutory rate of 34% to the effective income tax rate is as follows:

 

                 
    2012     2011  

Statutory rate

     34 %      34 % 

State taxes

     3       3  

Permanent differences

     (1 )      4  

Penalties and interest

     1       1  

Other

     (3 )      (1 ) 
   

 

 

    

 

 

  

Effective rate

     34 %      41 % 
   

 

 

    

 

 

  

The Company’s income tax expense for the year ended December 31, 2012 was partially offset by a state income tax refund, which resulted in a lower effective tax rate for the year.

The tax effects of temporary differences that give rise to deferred tax assets (liabilities) at December 31, 2012 and 2011 are as follows:

 

                 
    2012     2011  

Current deferred tax assets (liabilities):

                

Accrued expenses

   $ 130     $ 110  

Deferred rent

     27       110  

Accounts receivable

     673       623  

Inventory

     1,113       612  

Amortization

     (21 )      (17 ) 

Prepaid expenses

     (67 )      (54 ) 
   

 

 

    

 

 

  

Net current deferred tax assets

   $ 1,855     $ 1,384  
   

 

 

    

 

 

  

Long-term deferred tax assets (liabilities):

                

Property and equipment

   $ (1,182 )    $ (783 ) 

Deferred Rent

     396       300  
   

 

 

    

 

 

  

Net deferred tax liabilities

   $ (786 )    $ (483 ) 
   

 

 

    

 

 

  

 

The accounting standard related to income taxes applies to all tax positions and defines the confidence level that a tax position must meet in order to be recognized in the financial statements. This accounting standard requires that the tax effects of a position be recognized only if it is “more-likely-than-not” to be sustained by the taxing authority as of the reporting date. If a tax position is not considered “more-likely-than-not” to be sustained, then no benefits of the position are to be recognized. This accounting standard requires additional disclosures. The recognition of uncertain tax benefits are not expected to have a material impact on the Company’s effective tax rate or results of operations. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

 

                 
    2012     2011  

Unrecognized tax benefits at the beginning of the period

   $ 60     $ —    

Gross increases for tax positions

     7       60  
   

 

 

    

 

 

  

Unrecognized tax benefits at the end of the period

   $ 67     $ 60