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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2023
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 |  | 2023 |  |  | 2022 |
Current provision (benefit): |  |  |  |  |  |
Federal |  | $ | 892 |  |  | $ | 16 |
State |  |  | 181 |  |  |  | 41 |
Foreign |  |  | 102 |  |  |  | 96 |
Related to UTP |  |  | (34 | ) |  |  | 28 |
|  |  | 1,141 |  |  |  | 181 |
Deferred provision (benefit): |  |  |  |  |  |  |  |
Federal |  |  | (266 | ) |  |  | - |
State |  |  | (103 | ) |  |  | - |
Foreign |  |  | 5 |  |  |  | - |
|  |  | (364 | ) |  |  | - |
Total tax provision (benefit) |  | $ | 777 |  |  | $ | 181 |
Income Before Income Taxes | Income before income taxes was earned in the following tax jurisdictions:
(in thousands) |  | Year Ended December 31, |
Income (Loss) Before Income Taxes |  | 2023 |  |  | 2022 |
United States |  | $ | 3,765 |  |  | $ | 733 |
Spain |  |  | 25 |  |  |  | (83 | )
Canada |  |  | 755 |  |  |  | 758 |
TOTAL |  | $ | 4,545 |  |  | $ | 1,408 |
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: |  | 2023 |  |  | 2022 |
(in thousands) |  |  |  |  |  |
Inventory |  | $ | 412 |  |  | $ | 471 |
Stock-based compensation |  |  | 55 |  |  |  | 93 |
Accounts receivable |  |  | 8 |  |  |  | 14 |
Sales returns |  |  | 49 |  |  |  | 47 |
Foreign currency translation gain/loss in OCI |  |  | 512 |  |  |  | 689 |
Net operating losses |  |  | 182 |  |  |  | 261 |
Accrued expenses |  |  | 170 |  |  |  | 63 |
Leases |  |  | 108 |  |  |  | 152 |
Total deferred income tax assets |  |  | 1,496 |  |  |  | 1,790 |
Less: valuation allowance |  |  | (154 | ) |  |  | (1,151 | )
Total deferred income tax assets, net of valuation allowance |  | $ | 1,342 |  |  | $ | 639 |
Property and equipment depreciation |  | $ | 471 |  |  | $ | 639 |
Total deferred income tax liabilities |  |  | 471 |  |  |  | 639 |
Net deferred tax asset (liability) |  | $ | 871 |  |  | $ | - |
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, |
|  | 2023 |  |  | 2022 |
Statutory rate – Federal U.S. income tax |  |  | 21.0 | % |  |  | 21.0 | %
State and local taxes |  |  | 5.3 | % |  |  | (0.6 | )%
Permanent book/tax differences |  |  | 2.4 | % |  |  | 11.3 | %
Change in valuation allowance |  |  | (6.8 | )% |  |  | (20.3 | )%
Interest on Uncertain Tax Position |  |  | (0.8 | )% |  |  | 2.0 | %
Income tax credits |  |  | (2.3 | )% |  |  | - |
Other, net |  |  | (1.7 | )% |  |  | (0.5 | )%
Effective rate |  |  | 17.1 | % |  |  | 12.9 | %
Reconciliation of Uncertain Tax Positions | A reconciliation of the beginning and ending amount of uncertain tax positions (“UTP”) is as follows:
|  | 2023 |  |  | 2022 |
UTP at beginning of the year |  | $ | 450 |  |  | $ | 415 |
Gross (decrease) increase to tax positions in current period |  |  | (27 | ) |  |  | 7 |
Interest expense |  |  | (35 | ) |  |  | 28 |
UTP at end of year |  | $ | 388 |  |  | $ | 450 |

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