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Income taxes | 9 Months Ended
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Jan. 31, 2024
Income Taxes [Abstract] |
Income Taxes | 15. Income taxes Maison Solutions is a Delaware holding company that is subject to the U.S. income tax. Maison Monrovia and Maison San Gabriel are pass through entities whose income or losses flow through Maison Solution’s income tax return. The provision for income taxes provisions consisted of the following components:
|  | Three Months ended January 31, 2024 |  |  | Three Months ended January 31, 2023 |
Current: |  |  |  |  |  |
Federal income tax expense |  | $ | 117,066 |  |  | $ | 51,442 |
State income tax expense |  |  | 44,058 |  |  |  | 37,346 |
Deferred: |  |  |  |  |  |  |  |
Federal income tax expense (benefit) |  |  | (1,852 | ) |  |  | 7,716 |
State income tax expense (benefit) |  |  | (616 | ) |  |  | 2,566 |
Total |  | $ | 158,656 |  |  | $ | 99,070 |
|  | Nine Months ended January 31, 2024 |  |  | Nine Months ended January 31, 2023 |
Current: |  |  |  |  |  |
Federal income tax expense |  | $ | 314,714 |  |  | $ | 126,185 |
State income tax expense |  |  | 116,143 |  |  |  | 71,195 |
Deferred: |  |  |  |  |  |  |  |
Federal income tax benefit |  |  | (4,604 | ) |  |  | (6,175 | )
State income tax benefit |  |  | (1,531 | ) |  |  | (2,054 | )
Total |  | $ | 424,722 |  |  | $ | 189,151 |
The following is a reconciliation of the difference between the actual (benefit) provision for income taxes and the (benefit) provision computed by applying the federal statutory rate on income (loss) before income taxes:
|  | Three Months ended January 31, 2024 |  |  | Three Months ended January 31, 2023 |
Federal statutory rate expense (benefit) |  |  | (79,149 | ) |  |  | 274,164 |
State statutory rate, net of effect of state income tax deductible to federal income tax |  |  | (25,658 | ) |  |  | 92,473 |
Permanent difference – penalties, interest, and others |  |  | 73,945 |  |  |  | 29,348 |
Utilization of net operating losses (“NOL”) |  |  | — |  |  |  | (244,859 | )
Changes in valuation allowance |  |  | 189,518 |  |  |  | (52,056 | )
Tax expense per financial statements |  |  | 158,656 |  |  |  | 99,070 |
|  | Nine Months ended January 31, 2024 |  |  | Nine Months ended January 31, 2023 |
Federal statutory rate expense (benefit) |  |  | (9,676 | ) |  |  | 297,661 |
State statutory rate, net of effect of state income tax deductible to federal income tax |  |  | (1,249 | ) |  |  | 100,952 |
Permanent difference – penalties, interest, and others |  |  | 86,085 |  |  |  | 54,845 |
Utilization of NOL |  |  | (24,138 | ) |  |  | (300,508 | )
Change in valuation allowance |  |  | 373,700 |  |  |  | 36,201 |
Tax expense per financial statements |  |  | 424,722 |  |  |  | 189,151 |
Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred taxes were comprised of the following:
|  | January 31, 2024 |  |  | April 30, 2023 |
Deferred tax assets: |  |  |  |  |  |
Bad debt expense |  | $ | 54,206 |  |  | $ | 70,929 |
Inventory impairment loss |  |  | 39,642 |  |  |  | — |
Investment loss on equity method investment |  |  | 17,902 |  |  |  | — |
Lease liabilities, net of ROU |  |  | 603,181 |  |  |  | 441,997 |
NOL |  |  | 451,006 |  |  |  | 583,490 |
Valuation allowance |  |  | (1,151,652 | ) |  |  | (1,085,551 | )
Deferred tax assets, net |  | $ | 14,285 |  |  | $ | 10,865 |
Deferred tax liability: |  |  |  |  |  |  |  |
Trademark acquired at acquisition of Maison Monterey Park |  |  | 48,558 |  |  |  | 51,273 |
Deferred tax liability, net of deferred tax assets |  | $ | 34,273 |  |  | $ | 40,408 |
As of January 31, 2024 and April 30, 2023, Maison and Maison El Monte had approximately $1.52 million and $2.25 million, respectively, of U.S. federal NOL carryovers available to offset future taxable income which do not expire but are limited to 80% of income until utilized. As of January 31, 2024 and April 30, 2023, Maison and Maison El Monte had approximately $1.89 million and $1.58 million, respectively, of California state net operating loss which can be carried forward up to 20 years to offset future taxable income. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends upon the Company’s future generation of taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. After consideration of all the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. The Company recorded $6,421 and $17,871of interest and penalties related to understated income tax payments for the three months ended January 31, 2024 and 2023, respectively. The Company recorded $10,985 and $38,243 of interest and penalties related to understated income tax payments for the nine months ended January 31, 2024 and 2023, respectively. As of January 31, 2024 and April 30, 2023, the Company had significant uncertain tax positions of $114,267 and $103,282, respectively. As of January 31, 2024, the Company’s U.S. income tax returns filed for the year ending on December 31, 2020 and thereafter are subject to examination by the relevant taxation authorities.

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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/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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