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Note 11 - Income Taxes
 12 Months Ended
Dec. 31, 2011
Income Tax Disclosure [Text Block]
Note 11 – Income Taxes

At December 31, 2011, the Company had approximately $251,000 of capital loss carryforwards, $600,000 of New York State investment tax credit carryforwards and $431,000 of federal research and development credits.

If not utilized, the capital loss carryover will expire in 2014, the investment tax credits expire from 2012 through 2027 and the research and development tax credits expire from 2027-2031. Based on the available objective evidence, including the Company’s history of taxable income and the character of that income, management believes it is more likely than not that these components of the Company’s deferred tax assets will not be fully utilized. Accordingly, the Company provided for a partial valuation allowance against its total net deferred tax assets at December 31, 2011 and 2010 of approximately $475,000 and $787,000 attributable to these components.

The expense (benefit) for income taxes includes the following:            
    2011     2010  
Current:
           
  Federal    $ 476,857     $ 114,505  
  State       98,481       18,354  
     Total Current Tax Provision           575,338       132,859  
Deferred:                
  Federal          454,559       62,282  
  State      (21,380 )         14,654  
     Total Deferred Tax Provision     433,179       76,936  
Income tax expense   $ 1,008,517     $ 209,795  

The tax effects of temporary differences giving rise to significant portions of the net deferred taxes are as follows:

    2011     2010  
Allowance for doubtful accounts    $ 10,873     $ 8,503  
Inventory capitalization               10,509       28,850  
Depreciation and amortization       (622,307 )       (374,663 )
Investment tax credits            600,000       806,495  
Research & development tax credits         431,006       595,634  
Compensation costs                  250,931       412,714  
Vacation accrual         268,104       216,731  
Capital loss carryforward             105,474       105,474  
Gross deferred tax asset       1,054,590       1,799,738  
Less valuation allowance       (475,000 )        (786,969 )
Net deferred tax asset             $ 579,590     $ 1,012,769  
                 
Net current deferred tax asset           189,510       232,481  
Net long-term deferred tax asset       390,080       780,288  
Net deferred tax asset         $ 579,590     $ 1,012,769  

The reconciliation of the federal statutory income tax rate to our effective tax rate is as follows:

   
2011
   
2010
 
             
Expected provision at federal statutory tax rate (34%)
  $ 1,627,798     $ 252,133  
State taxes, net of federal benefit
    50,887       21,785  
Depreciation & amortization
    ----       83,596  
Stock-based compensation expense
    (297,471 )     (21,708 )
Domestic production activities deduction
    (145,453 )     (20,346 )         
Capital loss carryforward
     (85,384 )     ----  
Federal research & development credit
    (169,172 )     (93,918 )
Other permanent differences
    27,312       (11,747 ) 
Income tax expense (benefit)
  $ 1,008,517     $ 209,795