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Income Taxes
 9 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

7. Income Taxes

 

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (“IRA 2022”). The IRA 2022, among other tax provisions, imposes a 15% corporate alternative minimum tax on corporations with book financial statement income in excess of $1.0 billion, effective for tax years beginning after December 31, 2022. The IRA 2022 also establishes a 1% excise tax on stock repurchases made by publicly traded U.S. corporations, effective for stock repurchases in excess of an annual limit of $1.0 million after December 31, 2022. The IRA 2022 did not impact the Company’s current year tax provision or the Company’s financial statements.

 

The income tax provision consists of the following for the nine months ended December 31, 2023 and 2022:

 

   2023   2022 
   Nine Months Ended 
   December 31 
   2023   2022 
Current income tax expense:          
Federal  $-   $- 
State   79,123    115,236 
Total current income tax expense   79,123    115,236 
Deferred income tax expense:          
Federal   319,848    - 
State   -    - 
Total deferred income tax expense   319,848    - 
Total income tax expense:  $398,971   $115,236 

 

 

Federal income tax for the nine months ended December 31, 2023 was $319,848. There was no federal income tax expense for the nine months ended December 31, 2022 because the Company was in a net deferred tax asset position.

 

A reconciliation of the provision for income taxes to income taxes computed using the federal statutory rate for the nine months ended December 31 follows:

 

   2023   2022 
Tax expense at federal statutory rate (1)  $294,106   $788,586 
Statutory depletion carryforward   (5,694)   (257,509)
Change in valuation allowance   (3,578)   (550,947)
Permanent differences   35,014    19,812 
State income expense   79,123    115,236 
Other   -    58 
Total income tax  $398,971   $115,236 
Effective income tax rate   27%   3%

 

(1) The federal statutory rate was 21% for nine months ended December 31, 2023 and 2022.