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Note N - Income Taxes | 12 Months Ended
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Dec. 31, 2018
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | NOTE N — INCOME TAXES Due to Milestone Scientific's history of operating losses, a full valuation allowances have been provided for all of Milestone Scientific's deferred tax assets At December 31, 2018 and 2017, no recognition was given to the utilization of the remaining net operating loss carry forwards in each of these periods. Deferred tax attributes resulting from differences between financial accounting amounts and tax bases of assets and liabilities at December 31, 2018 and 2017 are as follows:
|  | 2018 |  |  | 2017 |
Allowance for doubtful accounts |  | $ | 3,000 |  |  | $ | 3,000 |
Warranty reserve |  |  | 29,000 |  |  |  | 20,000 |
Impaired Assets |  |  | 435,000 |  |  |  | 5,000 |
Inventory Reserve |  |  | 551,000 |  |  |  |  |
Capital Gains |  |  | - |  |  |  | 45,000 |
Deferred officers' compensation |  |  | 715,000 |  |  |  | 636,000 |
Depreciation and Amortization |  |  | 345,000 |  |  |  | 181,000 |
Deferred revenue |  |  |  |  |  |  | 478,000 |
Net operating loss carryforward |  |  | 16,500,000 |  |  |  | 15,116,000 |
Subtotal |  |  | 18,578,000 |  |  |  | 16,484,000 |
Valuation allowance |  |  | (18,578,000 | ) |  |  | (16,484,000 | )
Non-current deferred tax asset |  | $ | - |  |  | $ | - |
The deferred tax asset, before valuation allowance, has been calculated on rates anticipated to be effect when the temporary differences reverse. Accordingly, based on the change in Federal tax rates promulgated in December 2017, effective January 1, 2018, the Company utilized a Federal rate of 21% and accordingly existing deferred tax assets upon the tax law act being signed into law on December 22, 2017, the Company revalued its deferred tax assets which resulted in a tax provision charge of $8,677,000, offset by a corresponding decrease in the valuation allowance. As of December 31, 2018, federal net operating loss carry-forwards are approximately $65,300,000. As of December 31, 2017, and Milestone Scientific has federal net operating loss carry-forwards of approximately $60,000,000, which is comprised solely of losses attributable Milestone Scientific and its subsidiaries. Net operating losses will be available to offset future taxable income, if any, through December 2038. As of December 31, 2018, state net operating losses were approximately $30,800,000. As of December 31, 2017 Milestone, Scientific has state net operating loss carry-forwards of approximately $26,000,000. Net operating losses will be available to offset future taxable income, if any, through December 2038. The utilization of Milestone Scientific's net operating losses may be subject to a substantial limitation due to the "change of ownership provisions" under Section 382 of the Internal Revenue Code and similar state provisions. Such limitation may result in the expiration of the net operating loss carry forwards before their utilization. Milestone Scientific has established a 100% valuation allowance for all its deferred tax assets due to uncertainty as to their future realization. As of December 31, 2018, and 2017, state tax liability was approximately $24,000 and $19,000 respectively. Such expense was recognized in the accompanying consolidated financial statements. Accounting for uncertainties in income taxes prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition. At December 31, 2018 and 2017, we had no uncertain tax positions that required recognition in the consolidated financial statements. Milestone Scientific's policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the Statements of Operations. No interest and penalties are present for periods open. Tax returns for the 2015, 2016, and 2017 years are subject to audit by federal and state jurisdictions. A reconciliation of the statutory tax rates for the years ended December 31, is as follows:
|  | 2018 |  |  | 2017 |
Statutory rate |  |  | 21 | % |  |  | 34 | %
State income tax-all states |  |  | 7 | % |  |  | 6 | %
Non-deductible Stock based compensation |  |  | 0 | % |  |  | 0 | %
Deferred provision for effect of change in Federal rate |  |  | 0 | % |  |  | 164 | %
|  |  | 28 | % |  |  | 204 | %
Valuation allowance |  |  | -28 | % |  |  | -204 | %
Effective tax rate |  |  | 0 | % |  |  | 0 | %

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