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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2021
INCOME TAXES [Abstract] |
Provision for Income Taxes | The provision for income taxes consists of the following:
(in thousands) |  | Year Ended December 31, |
Income Tax Benefit |  | 2021 |  |  | 2020 |
Current provision (benefit): |  |  |  |  |  |
Federal |  | $ | 640 |  |  | $ | (1,385 | )
State |  |  | 98 |  |  |  | 65 |
Foreign |  |  | - |  |  |  | 6 |
Related to UTP |  |  | 19 |  |  |  | 20 |
|  |  | 757 |  |  |  | (1,294 | )
Deferred provision (benefit): |  |  |  |  |  |  |  |
Federal |  |  | - |  |  |  | (62 | )
State |  |  | - |  |  |  | (3 | )
Foreign |  |  | 82 |  |  |  | (19 | )
|  |  | 82 |  |  |  | (84 | )
Total tax provision (benefit) |  | $ | 839 |  |  | $ | (1,378 | )
Income (Loss) Before Income Taxes | Income (loss) before income taxes was earned in the following tax jurisdictions:
(in thousands) |  | Year Ended December 31, |
Income (Loss) Before Income Taxes |  | 2021 |  |  | 2020 |
United States |  | $ | 2,552 |  |  | $ | (6,222 | )
Spain |  |  | (135 | ) |  |  | 161 |
Canada |  |  | (229 | ) |  |  | (204 | )
Australia |  |  | (1 | ) |  |  | (7 | )
United Kingdom |  |  | 6 |  |  |  | (7 | )
TOTAL |  | $ | 2,193 |  |  | $ | (6,279 | )
Income Tax Effects of Temporary Differences Impacting Deferred Income Tax Assets and Liabilities | The income tax effects of temporary differences that give rise to significant portions of deferred income tax assets and liabilities are as follows:
Deferred income tax assets: |  | 2021 |  |  | 2020 |
(in thousands) |  |  |  |  |  |
Inventory |  | $ | 464 |  |  | $ | 498 |
Stock-based compensation |  |  | 59 |  |  |  | 63 |
Accounts receivable |  |  | 4 |  |  |  | 4 |
Sales returns |  |  | 125 |  |  |  | 105 |
Foreign currency translation gain/loss in OCI |  |  | 342 |  |  |  | 323 |
Goodwill and other intangible assets amortization |  |  | - |  |  |  | 5 |
Net operating loss |  |  | 646 |  |  |  | 665 |
Accrued expenses |  |  | 359 |  |  |  | 170 |
Leases |  |  | 195 |  |  |  | 250 |
Other |  |  | 2 |  |  |  | 1 |
Total deferred income tax assets |  |  | 2,196 |  |  |  | 2,084 |
Less: valuation allowance |  |  | (1,489 | ) |  |  | (1,320 | )
Total deferred income tax assets, net of valuation allowance |  | $ | 707 |  |  | $ | 764 |
Property and equipment depreciation |  | $ | 707 |  |  | $ | 682 |
Total deferred income tax liabilities |  |  | 707 |  |  |  | 682 |
Net deferred tax asset (liability) |  | $ | - |  |  | $ | 82 |
Reconciliation of Effective Tax Rate from Statutory Rate | Below is a reconciliation of our effective tax rate from the statutory rate:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |
Statutory rate – Federal U.S. income tax |  |  | 21 | % |  |  | 21 | %
State and local taxes |  |  | 9 | % |  |  | 3 | %
Permanent book/tax differences |  |  | 3 | % |  |  | (2 | )%
Difference in tax rates in loss carryback periods |  |  | 0 | % |  |  | 8 | %
Change in valuation allowance |  |  | 6 | % |  |  | (10 | )%
Rate differential on UTP reversals |  |  | 1 | % |  |  | 0 | %
Other, net |  |  | (2 | )% |  |  | 2 | %
Effective rate |  |  | 38 | % |  |  | 22 | %
Reconciliation of Uncertain Tax Positions | A reconciliation of the beginning and ending amount of uncertain tax positions (“UTP”) is as follows:
|  | 2021 |  |  | 2020 |
UTP at beginning of the year |  | $ | 393 |  |  | $ | 296 |
Gross increase to tax positions in current period |  |  | 3 |  |  |  | 77 |
Interest expense |  |  | 19 |  |  |  | 20 |
UTP at end of year |  | $ | 415 |  |  | $ | 393 |

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