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INCOME TAXES | 12 Months Ended
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Dec. 31, 2015
INCOME TAXES |
INCOME TAXES | 9.INCOME TAXES The provision for income taxes consists of the following:
|  | For the Years Ended December 31, |
|  | 2015 |  | 2014 |  | 2013 |
Current tax provision |  |  |  |  |  |  |
Federal |  | $ | — |  | $ | — |  | $ | 83,470 |
State |  | 7,877 |  | 8,177 |  | 7,502 |
Total current provision |  | 7,877 |  | 8,177 |  | 90,972 |
Deferred tax provision |  |  |  |  |  |  |
Federal |  | — |  | — |  | — |
State |  | — |  | — |  | — |
Total deferred tax provision |  | — |  | — |  | — |
Total income tax provision |  | $ | 7,877 |  | $ | 8,177 |  | $ | 90,972 |
The Company has $15.8 million in tax benefits attributable to carry back losses for federal tax purposes. The loss carry forwards will begin to expire in 2028 for federal tax purposes and began to expire for state tax purposes in 2013. The Company also has credits for alternative minimum taxes (“AMT”) paid of $202 thousand that are available to offset future federal income taxes, excluding AMT. Such credits do not expire. Deferred taxes are provided for those items reported in different periods for income tax and financial reporting purposes. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below:
|  | December 31, |
|  | 2015 |  | 2014 |
Deferred tax assets |  |  |  |  |
Net operating loss carry forwards |  | $ | 5,979,717 |  | $ | 4,704,612 |
Credit for alternative minimum tax paid |  | 201,773 |  | 201,773 |
Accrued expenses and reserves |  | 1,383,461 |  | 1,424,969 |
Employee stock option expense |  | 303,465 |  | 315,711 |
Nonemployee stock option expense |  | 12,770 |  | 15,546 |
Inventory |  | 356,170 |  | 287,190 |
Litigation proceeds subject to stipulation |  | — |  | 2,929,640 |
Deferred tax assets |  | 8,237,356 |  | 9,879,441 |
Deferred tax liabilities |  |  |  |  |
Property and equipment |  | (485,384 | ) | (493,985 | )
Deferred tax liabilities |  | (485,384 | ) | (493,985 | )
Net deferred assets |  | 7,751,972 |  | 9,385,456 |
Valuation allowance |  | (7,751,972 | ) | (9,385,456 | )
Net deferred tax assets |  | $ | — |  | $ | — |
The valuation allowance decreased $1,633,485 for 2015. The valuation allowance increased $807,790 for 2014. A reconciliation of income taxes based on the federal statutory rate and the effective income tax rate is summarized as follows:
|  | December 31, |
|  | 2015 |  | 2014 |  | 2013 |
Income tax at the federal statutory rate |  | 35.0 | % | 35.0 | % | 35.0 | %
State tax, net of federal tax |  | 2.9 |  | 2.9 |  | 2.9 |
Change in valuation allowance |  | (37.8 | ) | (34.3 | ) | (39.3 | )
Permanent differences |  | 0.7 |  | (0.7 | ) | (0.3 | )
Alternative minimum tax |  | — |  | — |  | (1.4 | )
Other |  | (0.6 | ) | (3.2 | ) | 1.6 |
Effective tax rate |  | 0.2 | % | (0.3 | )% | (1.5 | )%
The Company files income tax returns in the U.S. federal jurisdiction and in various state and local jurisdictions. The Company’s federal income tax returns for all tax years ended on or after December 31, 2012, remain subject to examination by the Internal Revenue Service. The Company’s state and local income tax returns are subject to examination by the respective state and local authorities over various statutes of limitations, most ranging from three to five years from the date of filing.

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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 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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