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5. INCOME TAXES | 12 Months Ended
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Feb. 28, 2019
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | 5. INCOME TAXES Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effects of significant items comprising our net deferred tax assets and liabilities are as follows:
|  | February 28, |
|  | 2019 |  |  | 2018 |
Deferred tax assets: |  |  |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | 72,500 |  |  | $ | 149,600 |
Inventory overhead capitalization |  |  | 87,600 |  |  |  | 69,800 |
Inventory valuation allowance |  |  | 13,100 |  |  |  | 47,200 |
Inventory valuation allowance – noncurrent |  |  | 88,900 |  |  |  | 70,700 |
Allowance for sales returns |  |  | 27,500 |  |  |  | 26,000 |
Capital loss carryforward |  |  | 116,200 |  |  |  | 111,900 |
Accruals |  |  | 252,900 |  |  |  | 141,700 |
Deferred tax assets |  |  | 658,700 |  |  |  | 616,900 |
Less valuation allowance |  |  | (116,200 | ) |  |  | (111,900 | )
Total deferred tax assets |  |  | 542,500 |  |  |  | 505,000 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | (1,415,100 | ) |  |  | (641,900 | )
Total deferred tax liabilities |  |  | (1,415,100 | ) |  |  | (641,900 | )
Net deferred income tax liabilities |  | $ | (872,600 | ) |  | $ | (136,900 | )
On December 22, 2017, President Trump signed into law the Tax Act. Among its provisions, the Tax Act reduces the statutory U.S. Corporate income tax rate from a maximum rate of 35% to 21% effective January 1, 2018. The Tax Act also provides for accelerated deductions of certain capital expenditures made after September 27, 2017 through bonus depreciation. Upon the enactment of the Tax Act in fiscal 2018, we recorded a reduction in our deferred income tax liabilities of $43,200 for the effect of the aforementioned change in the U.S. statutory income tax rate. The application of the Tax Act may change due to regulations subsequently issued by the U.S. Treasury Department. Management has assessed the evidence to estimate whether sufficient future capital gains will be generated to utilize the existing capital loss carryforward. As no current expectation of capital gains exists, management has determined that a valuation allowance is necessary to reduce the carrying value of the capital loss carryforward deferred tax asset as it is “more likely than not” that such assets are unrealizable. The amount of the deferred tax asset considered realizable, however, could be adjusted if future capital gains are generated during the carryforward period which ended February 28, 2019. Management has determined that no valuation allowance is necessary to reduce the carrying value of other deferred tax assets as it is “more likely than not” that such assets are realizable. The components of income tax expense are as follows:
|  | February 28, |
|  | 2019 |  |  | 2018 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | 1,253,600 |  |  | $ | 1,964,700 |
State |  |  | 513,100 |  |  |  | 388,400 |
|  |  | 1,766,700 |  |  |  | 2,353,100 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | 674,500 |  |  |  | 239,800 |
State |  |  | 61,200 |  |  |  | 25,100 |
|  |  | 735,700 |  |  |  | 264,900 |
Total income tax expense |  | $ | 2,502,400 |  |  | $ | 2,618,000 |
The following reconciles our expected income tax rate to the U.S. federal statutory income tax rate:
|  | February 28, |
|  | 2019 |  |  | 2018 |
U.S. federal statutory income tax rate |  |  | 21.0 | % |  |  | 31.8 | %
U.S. state and local income taxes–net of federal benefit |  |  | 4.7 | % |  |  | 4.0 | %
Other |  |  | 1.6 | % |  |  | (2.4 | %)
Total income tax expense |  |  | 27.3 | % |  |  | 33.4 | %
Our U.S. federal statutory income tax rate declined from 34.0% to 21.0% as of January 1, 2018. As our fiscal year ends February 28, our federal effective tax rate for fiscal 2018 was a blended rate of 31.8%. We file our tax returns in the U.S. and certain state jurisdictions in which we have nexus. We are no longer subject to income tax examinations by tax authorities for fiscal years before 2017. Based upon a review of our income tax filing positions, we believe that our positions would be sustained upon an audit and do not anticipate any adjustments that would result in a material change to our financial position. Therefore, no reserves for uncertain income tax positions have been recorded. We classify interest and penalties associated with income taxes as a component of income tax expense on the statements of earnings.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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