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Income Taxes | 12 Months Ended
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Mar. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | 7. Income Taxes The U.S. Tax Cuts and Jobs Act (“TCJA") was enacted on December 22, 2017 and introduces significant changes to U.S. income tax law. TCJA includes a broad range of tax reform including changes to tax rates and deductions that were effective January 1, 2018. The decrease in the enacted corporate tax rate to be applied when the temporary differences are realized or settled ultimately resulted in a one-time revaluation of the net deferred tax asset of $3.1 million with a corresponding charge to income tax expense. The effects of TCJA increased income tax expense to a level that reduced net income to a net loss for the twelve months ended March 31, 2018. The provision for income taxes (income tax benefits) consists of the following for the years ended March 31:
|  | (In thousands) |
|  | 2019 |  |  | 2018 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | (39 | ) |  | $ | 1,705 |
State |  |  | (66 | ) |  |  | 340 |
Total current |  |  | (105 | ) |  |  | 2,045 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | (844 | ) |  |  | 1,847 |
State |  |  | 9 |  |  |  | 369 |
Total deferred |  |  | (835 | ) |  |  | 2,216 |
Income tax expense (benefit) |  | $ | (940 | ) |  | $ | 4,261 |
The net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes are reflected in deferred income taxes. Significant components of the Company’s deferred tax assets consist of the following as of March 31:
|  | (In thousands) |
Deferred Tax Assets |  | 2019 |  |  | 2018 |
Allowance for credit losses not currently deductible for tax purposes |  | $ | 4,431 |  |  | $ | 5,811 |
Share-based compensation |  |  | 276 |  |  |  | 266 |
Federal and state net operating loss carryforwards |  |  | 2,293 |  |  |  | — |
Other items |  |  | 201 |  |  |  | 212 |
Total deferred tax assets |  |  | 7,201 |  |  |  | 6,289 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Other items |  |  | 77 |  |  |  | — |
Total deferred tax liabilities |  |  | 77 |  |  |  | — |
Deferred income taxes |  | $ | 7,124 |  |  | $ | 6,289 |
The provision (benefit) for income taxes reflects an effective U.S tax rate, which differs from the corporate tax rate for the following reasons:
|  | (In thousands) |
|  | 2019 |  |  | 2018 |
Provision (benefit) for income taxes at Federal statutory rate |  | $ | (845 | ) |  | $ | 976 |
Increase (decrease) resulting from: |  |  |  |  |  |  |  |
State income taxes, net of Federal benefit |  |  | (206 | ) |  |  | 491 |
Tax Reform – Rate Change |  |  | 160 |  |  |  | 3,127 |
Other |  |  | (49 | ) |  |  | (333 | )
Income tax expense (benefit) |  | $ | (940 | ) |  | $ | 4,261 |
The Company’s effective tax rate decreased to 20.5% in fiscal 2019 from 134.7% in fiscal 2018, resulting from TCJA. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective positive evidence evaluated was the cumulative pre-tax over the three-year period ended March 31, 2019. On the basis of this evaluation, as of March 31, 2019, a valuation allowance was not required. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income are reduced. The Company has U.S. federal, state, and municipal income tax net operating loss carryforwards of $1.9 million and $0.4 million. The U.S. federal net operating loss carryforward and a portion of the state net operating loss carryforwards will not expire. The remaining state net operating loss carryforwards will begin to expire as of March 31, 2020. The Company considers the earnings of the Company’s U.S. subsidiaries to be indefinitely invested outside Canada on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and the Company’s specific plans for reinvestment of those subsidiary earnings. The Company has not recorded a deferred tax liability related to the Canadian income taxes and U.S. withholding taxes on approximately $3.6 million of undistributed earnings of the U.S. subsidiaries indefinitely invested outside Canada. If the Company decided to repatriate the U.S. earnings, it would need to adjust its income tax provision in the period the Company determined that the earnings will no longer be indefinitely invested outside of Canada.

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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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