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Note 12 - Income Taxes | 12 Months Ended
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Dec. 31, 2022
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | Note 12. Income Taxes Income tax expense for the years ended December 31, 2022 and 2021 consists of the following:
|  | 2022 |  |  | 2021 |
Current income tax (expense) benefit |  |  |  |  |  |  |  |
Federal |  | $ | (2,533 | ) |  | $ | - |
State & Local |  |  | (7,566 | ) |  |  | (1,813 | )
|  |  | (10,099 | ) |  |  | (1,813 | )
Deferred income tax (expense) benefit |  |  |  |  |  |  |  |
Federal |  |  | 723,041 |  |  |  | 973,918 |
State & Local |  |  | 385,342 |  |  |  | 98,749 |
|  |  | 1,108,383 |  |  |  | 1,072,667 |
Income tax benefit |  | $ | 1,098,284 |  |  | $ | 1,070,854 |
The provision for income taxes is at an effective rate different from the federal statutory rate due principally to the following:
|  | 2022 |  |  | 2021 |
Loss before taxes |  | $ | (18,852,122 | ) |  | $ | (2,202,303 | )
Income tax benefit at federal statutory rate |  | $ | 3,957,892 |  |  | $ | 462,484 |
State income tax benefit, net of federal benefit |  |  | 379,365 |  |  |  | 97,318 |
Permanent Differences |  |  | (1,313,947 | ) |  |  | (111,237 | )
Net Operating Loss ("NOL") expirations |  |  | (12,431 | ) |  |  | - |
Other |  |  | 163,945 |  |  |  | 19,485 |
Federal valuation allowance |  |  | (2,076,540 | ) |  |  | 602,804 |
Income tax benefit |  | $ | 1,098,284 |  |  | $ | 1,070,854 |
Deferred Income Taxes Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities were as follows:
|  | 2022 |  |  | 2021 |
Deferred tax assets |  |  |  |  |  |  |  |
Net operating losses |  | $ | 2,649,902 |  |  | $ | 547,035 |
Stock-based compensation |  |  | 743,915 |  |  |  | 428,072 |
Accrued commissions |  |  | 17,836 |  |  |  | 50,047 |
Accrued vacations |  |  | 46,665 |  |  |  | 41,331 |
Fixed assets |  |  | 1,509 |  |  |  | - |
Other |  |  | 28,025 |  |  |  | - |
Deferred tax assets before valuation allowance |  |  | 3,487,852 |  |  |  | 1,066,485 |
Valuation allowance |  |  | (2,793,271 | ) |  |  | - |
Net deferred tax assets |  |  | 694,581 |  |  |  | 1,066,485 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Intangible Assets |  |  | (753,702 | ) |  |  | (2,185,281 | )
Fixed Assets |  |  | - |  |  |  | (3,434 | )
Other |  |  | - |  |  |  | (45,274 | )
Deferred tax liabilities |  |  | (753,702 | ) |  |  | (2,233,989 | )
Net deferred tax liabilities |  | $ | (59,121 | ) |  | $ | (1,167,504 | )
The Company has net operating loss carryforwards of approximately $9.4 million, of which $1.3 million will expire, if unused, between the years 2023 and 2037. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. The Company has analyzed its income tax positions using the criteria required by U.S. GAAP and concluded that, as of December 31, 2022 and 2021, it has no material uncertain tax positions and no interest and penalties have been accrued. The Company has elected to recognize any estimated penalties and interest on its income tax liabilities as a component of its provision for income taxes. Our income tax returns are subject to examination by income taxing authorities in all jurisdictions for which we file tax returns, generally for three years after each return was filed, but extending to years from which net operating loss carryforwards are utilized to reduce current year taxes. We are not currently under audit in any jurisdiction.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://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 https://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 https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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