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Income Taxes

12 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 20 – INCOME TAXES

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the maximum U.S. federal corporate tax rate from 35% to 21%, allows net operating losses incurred in 2018 and beyond to be carried forward indefinitely, allows alternative minimum tax carryforwards to be partially refunded, beginning in 2018, and fully refunded by 2021, and creates new taxes on certain foreign sourced earnings.

The following is a geographical breakdown of loss before the provision for income taxes:

		Year ended September 30,
		2019				2018
Domestic		$	(10,774,136	)		$	(7,743,437	)
Foreign			(1,864,201	)			(6,174,381	)
Loss before provision for income taxes		$	(12,638,337	)		$	(13,917,818	)

The provision for income taxes consisted of the following:

		September 30, 2019				September 30, 2018
Current (benefit)/provision
Federal		$	-			$	-
State			7,978				1,859
Foreign			-				245,419
Total current (benefit)/provision			7,978				247,278
Deferred provision
Federal			(1,343,562	)			(2,155,797	)
State			-				(667,270	)
Foreign			-				16,385
Total deferred provision		$	(1,343,562	)		$	(2,806,682	)
Total (benefit)/provision for income taxes		$	(1,335,584	)		$	(2,559,404	)
Effective Income tax rate			10.57	%			18.39	%

The following is a reconciliation of the effective income tax rate to the federal and state statutory rates:

		For the Fiscal Year				For the Fiscal Year
		Ended				Ended
		September 30, 2019				September 30, 2018
U.S. statutory rate			21.00	%			21.00	%
State statutory rate			6.50	%			6.50	%
Foreign  tax rate differential			0.00	%			-2.22	%
Change in valuation allowance			-12.83	%			0.00	%
Effect of change in rates			-6.23	%			0.00	%
Nondeducttible expenses			2.13	%			-1.20	%
Effective rate			10.57	%			24.09	%

The components of our deferred tax assets and liabilities are summarized as follows:

		September 30, 2019				September 30, 2018
Deferred Tax Assets:
Net operating loss carryforwards		$	5,635,584			$	4,153,803
Inventory			12,276				254,579
Prepaid expenses			-				12,837
Gain/loss on fixed asset disposal			13,051				31,747
Allowance for bad debt			3,486				-
Other			665				-
Total gross deferred taxes			5,665,062				4,452,966
Valuation allowance			(2,402,253	)			(1,485,437	)
Net deferred tax assets			3,262,809				2,967,529
Deferred Tax Liabilities:
Accrued vacation			(1,804	)			(4,336	)
Prepaid expenses			(25,305	)			-
Goodwill amortization			(112,800	)			(71,101	)
Research and development expenses			(42,216	)			(69,025	)
Depreciation			(821,440	)			(1,907,385	)
Total deferred tax liabilities			(1,003,565	)			(2,051,847	)
Total deferred tax assets (liabilities)			2,259,244				915,682

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- References

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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

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