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Income taxes
 6 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income taxes

Note 9 – Income taxes

 

On December 22, 2017, the President of the United States signed into law H.R.1, formerly known as the Tax Cuts and Jobs Act (the “Tax Legislation”). The Tax Legislation significantly revised the U.S. tax code by (i) lowering the U.S. federal statutory income tax rate from 35% to 21%, (ii) implementing a territorial tax system, (iii) imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries, (iv) requiring a current inclusion of global intangible low taxed income of certain earnings of controlled foreign corporations in U.S. federal taxable income, (v) creating the base erosion anti-abuse tax regime, (vi) implementing bonus depreciation that will allow for full expensing of qualified property, and (vii) limiting deductibility of interest and executive compensation expense, among other changes. The Company has computed its tax expenses using the new statutory rate effective on January 1, 2018 of 21%.

 

Other provisions of the new legislation include, but are not limited to, limiting deductibility of interest and executive compensation expense. These additional items have been considered in the income tax provision for the six months ended December 31, 2021 and 2020 and the impact was not material to the overall financial statements.

 

The income tax provision for the three and six months ended December 31, 2021 and 2020 consisted of the following: 

                    
   Three Months Ended December 31,   Six Months Ended December 31, 
   2021   2020   2021   2020 
Current:                    
Federal  $222,339   $155,348   $456,968   $357,351 
States   100,376    71,582    208,722    165,523 
Total current income tax provision   322,715    226,930    665,690    522,874 
Deferred:                    
Federal   –    –    –    – 
States   –    –    –    – 
Total deferred taxes   –    –    –    – 
                     
Total provision for income taxes  $322,715   $226,930   $665,690   $522,874 

 

The Company is subject to U.S. federal income tax as well as state income tax in certain jurisdictions. The tax years 2018 to 2020 remain open to examination by the major taxing jurisdictions to which the Company is subject. The following is a reconciliation of income tax expenses at the effective rate to income tax at the calculated statutory rates:  

                    
   Three Months Ended December 31,   Six Months Ended December 31, 
   2021   2020   2021   2020 
Statutory tax rate                    
Federal   21.00%    21.00%    21.00%    21.00% 
State    8.84%    8.84%    8.84%    8.84% 
Net effect of state income tax deduction and other permanent differences   (1.04%)   (1.56%)    (1.53%)    (1.74%) 
                     
Effective tax rate   28.80%    28.28%    28.31%    28.10% 

 

As of December 31, 2021 and June 30, 2021, the income taxes payable was $374,513 and $790,823, respectively.