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Income taxes | 3 Months Ended
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Sep. 30, 2022
Income Tax Disclosure [Abstract] |
Income taxes | Note 14 – Income taxes For the three months ended September 30, 2022, as a result of the Company’s inability to establish a reliable estimate for annual effective tax rate, the Company calculated income tax expense using the actual effective tax rate year to date, as opposed to the estimated annual effective tax rate, as provided in Accounting Standards Codification (ASC) 740-270-30-18. The income tax provision for the three months ended September 30, 2022 and 2021 consisted of the following:
Schedule of provision for income tax expense |  |  |  |  |  |
|  | September 30, 2022 |  |  | September 30, 2021 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | – |  |  | $ | 234,629 |
State |  |  | 9,921 |  |  |  | 108,346 |
Foreign |  |  | – |  |  |  | – |
Total current income tax provision |  |  | 9,921 |  |  |  | 342,975 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | (169,467 | ) |  |  | – |
State |  |  | (103,145 | ) |  |  | – |
Foreign |  |  | (185,105 | ) |  |  | – |
Total deferred taxes |  |  | (457,717 | ) |  |  | – |
Total provision for income taxes |  | $ | (447,796 | ) |  | $ | 342,975 |
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:
Schedule of reconciliation of effective income tax rate |  |  |  |  |  |
|  | September 30, 2022 |  |  | September 30, 2021 |
Statutory tax rate |  |  |  |  |  |  |  |
Federal |  |  | 21.00% |  |  |  | 21.00% |
State (net of federal benefit) |  |  | 5.85% |  |  |  | 8.84% |
Foreign tax rate difference |  |  | 3.91% |  |  |  | – |
Impairment loss on goodwill – permanent difference |  |  | (17.8% | ) |  |  | – |
Net effect of state income tax deduction and other permanent differences |  |  | (3.29% | ) |  |  | (1.97% | )
Effective tax rate |  |  | 9.67% |  |  |  | 27.87% |
As of September 30, 2022, prepaid income taxes to US tax authorities and income tax payable to Chinese tax authorities was $214,818 and $282,029, respectively. As of June 30, 2022, prepaid income taxes to US tax authorities and income tax payable to Chinese tax authorities was $375,087 and $299,563, respectively. The tax effects of temporary differences which give rise to significant portions of the deferred taxes are summarized as follows:
Schedule of deferred taxes |  |  |  |  |  |
|  | September 30, 2022 |  |  | June 30, 2022 |
Deferred tax assets |  |  |  |  |  |  |  |
263A calculation |  | $ | 215,434 |  |  | $ | 123,884 |
Inventory reserve |  |  | 106,071 |  |  |  | 71,026 |
State taxes |  |  | 2,226 |  |  |  | 45,234 |
Accrued expenses |  |  | 157,794 |  |  |  | 69,172 |
ROU assets / liabilities |  |  | 110,319 |  |  |  | 83,738 |
Stock-based compensation |  |  | 99,989 |  |  |  | 70,266 |
Net operating loss |  |  | 416,933 |  |  |  | – |
Others |  |  | 18,797 |  |  |  | 7,539 |
Total deferred tax assets |  |  | 1,127,663 |  |  |  | 470,859 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Depreciation |  |  | (118,576 | ) |  |  | (86,254 | )
Intangible assets acquired |  |  | (1,280,127 | ) |  |  | (1,323,720 | )
Total deferred tax liabilities |  |  | (1,398,703 | ) |  |  | (1,409,974 | )
Net deferred tax liabilities |  | $ | (271,040 | ) |  | $ | (939,115 | )

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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