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INCOME TAXES | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
INCOME TAXES | (8) INCOME TAXES The pre-tax income from continuing operations on which the provision for income taxes was computed is as follows (in thousands):
|  | 2017 |  | 2016 |
Domestic |  | $ | 7,494 |  | $ | 84 |
Foreign |  |  | — |  |  | — |
Total |  |  | 7,494 |  |  | 84 |
Income tax (benefit) expense consists of the following for the years ended December 31, 2017 and 2016 (in thousands):
|  | 2017 |  | 2016 |
Current tax (benefit) expense: |  |  |  |  |  |  |
Federal |  | $ | 119 |  | $ | 15 |
State |  |  | 10 |  |  | — |
Foreign |  |  | — |  |  | — |
Total tax (Benefit) expense: |  |  | 129 |  |  | 15 |
Deferred tax (benefit) expense: |  |  |  |  |  |  |
Federal |  |  | — |  |  | — |
State |  |  | — |  |  | — |
Foreign |  |  | — |  |  | — |
Total Deferred tax (benefit) expense: |  | $ | 129 |  | $ | 15 |
A reconciliation of income tax computed at the U.S. statutory rate of 34% to the effective income tax rate is as follows:
|  | 2017 |  | 2016 |
Statutory rate |  |  | 34 | % |  | 34 | %
State taxes |  |  | 3 |  |  | 3 |
Permanent differences and other |  |  | 0 |  |  | 2 |
Change in valuation allowance |  |  | (54) |  |  | 708 |
Other (true – up) |  |  | 7 |  |  | (729) |
Rate Adjustment |  |  | 12 |  |  | — |
Effective rate |  |  | 2 | % |  | 18 | %
The tax effects of temporary differences that give rise to deferred tax assets (liabilities) at December 31, 2017 and 2016 are as follows ( in thousands) :
|  | 2017 |  | 2016 |
Long-term deferred tax assets (liabilities): |  |  |  |  |  |  |
Accrued expenses |  | $ | 25 |  | $ | 51 |
Deferred Revenue |  |  | 217 |  |  | 322 |
Accounts receivable |  |  | 19 |  |  | 907 |
Prepaid Expenses |  |  | (9) |  |  | (15) |
Inventory |  |  | 92 |  |  | 20 |
Stock based compensation |  |  | 137 |  |  | 108 |
Tax Credits and NOL Carryforward |  |  | 1,141 |  |  | 4,314 |
Other |  |  | 6 |  |  | 9 |
Property and equipment |  |  | 35 |  |  | (115) |
Amortization |  |  | 64 |  |  | 105 |
Tax Credits and NOL Carryforward |  |  |  |  |  |  |
|  |  | 1,727 |  |  | 5,706 |
Less: Valuation allowance |  |  | (1,727) |  |  | (5,706) |
Net deferred tax assets (liabilities) |  | $ | - |  | $ | - |
The Tax Act reduces the U.S. statutory corporate tax rate from 35% to 21% for our tax years beginning in 2018, which resulted in the re-measurement of the federal portion of our deferred tax assets as of December 31, 2017 from 35% to the new 21% tax rate. The Company has generated a net operating loss carryforward (NOL) for federal income tax purposes of approximately $2.9 million as of December 31, 2017, which is available to offset taxable income in the future at various dates through 2037. The company also has available NOL carryforwards of approximately $4.9 million for state purposes, which expire at various dates ranging from five to seven years. As of December 31, 2017 and 2016, the Company has a valuation allowance of approximately $1.8 million and $5.7 million, respectively. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers past history, the scheduled reversal of deferred tax liabilities, available taxes in carryback periods, projected future taxable income projections and tax planning strategies in making this assessment. The Company has generated taxable income in 2017 and projects income in future periods. Based on these factors, the Company is currently evaluating the realization of its deferred tax assets and may have an adjustment to its valuation allowance in the future. 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. The 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. Differences between financial and tax reporting which do not meet this threshold are required to be recorded as unrecognized tax benefits. This standard also provides guidance on the presentation of tax matters and the recognition of potential IRS interest and penalties. As of December 31, 2017 and 2016, the Company does not have an unrecognized tax liability. The Company classifies penalty and interest expense related to income tax liabilities as an income tax expense. The Company did not incur any interest and penalties for the fiscal year ended December 31, 2017 and 2016. The Company files income tax returns in the U.S. and various state jurisdictions, and there are open statutes of limitations for taxing authorities to audit our tax returns from 2010 through the current period.

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- 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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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