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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 10 - INCOME TAXES Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect of a change in tax laws or rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Liabilities are established for uncertain tax positions expected to be taken in income tax returns when such positions are judged to meet the "more-likely-than-not" threshold based on the technical merits of the positions. Estimated interest and penalties related to uncertain tax positions are included as a component of other expenses. Through December 31, 2019, the Company has not identified any uncertain tax positions that it has taken. U.S. income tax returns for the years ended December 31, 2016 through December 31, 2019 and the Chinese income tax return for the year ended December 31, 2019 are open for possible examination. Under the current tax law in the PRC, the Company is and will be subject to the enterprise income tax rate of 25%. The provision for income taxes consisted of the following:
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |
Current |  | $ | - |  |  | $ | (178,408 | )
Deferred |  |  | - |  |  |  | 68,419 |
Total income tax expense |  | $ | - |  |  | $ | (109,989 | )
Following is a reconciliation of income taxes calculated at the federal statutory rates to the provision for income taxes:
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |
(Benefit) tax at statutory rate of 25% |  | $ | (5,175,512 | ) |  | $ | (2,715,040 | )
Prior year refund received |  |  | - |  |  |  | (178,408 | )
Other, primarily the difference in U.S. tax rates |  |  | 8,103 |  |  |  | 7,881 |
Change in valuation allowance |  |  | 5,167,409 |  |  |  | 2,775,578 |
Income tax (benefit) expense |  | $ | - |  |  | $ | (109,989 | )
The temporary differences which give rise to the deferred income tax assets and liability are as follows:
|  | December 31, |
|  | 2019 |  |  | 2018 |
Deferred income tax assets: |  |  |  |  |  |
Allowance for doubtful trade receivables |  | $ | 4,393,775 |  |  | $ | 4,453,769 |
Allowance for doubtful other receivables |  |  | 5,682 |  |  |  | 8,721 |
Inventory obsolescence reserve |  |  | 1,528,482 |  |  |  | 1,487,087 |
Expenses not deductible in current year |  |  | 1,085,520 |  |  |  | 1,101,268 |
Advances for intangible assets impairment |  |  | 9,765,906 |  |  |  | 5,628,803 |
Lease liability, net |  |  | 807 |  |  |  |  |
PRC net operating loss carry forward |  |  | 12,682,671 |  |  |  | 13,124,191 |
U.S. net operating loss carry forward |  |  | 1,296,813 |  |  |  | 1,187,112 |
Total deferred income tax assets |  |  | 30,759,656 |  |  |  | 26,990,951 |
Valuation allowance |  |  | (30,759,656 | ) |  |  | (26,990,951 | )
Net deferred income tax asset |  | $ | - |  |  | $ | - |
Deferred income tax liability: |  |  |  |  |  |  |  |
Intangible assets |  | $ | 753,444 |  |  | $ | 764,374 |
As of December 31, 2019, the Company had net operating loss carryforwards for PRC tax purposes of approximately $50.0 million which are available to offset any future taxable income through 2024. Approximately $3.8 million of these carryforwards expired in December 2019. The Company also has net operating losses for United States federal income tax purposes of approximately $6.2 million of which $5.1 million which are available to offset future taxable income, if any, through 2038, and $1.1 million are available for carryforward indefinitely subject to a limitation of 80% of taxable income for each tax year. Recent U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the "U.S. Tax Reform"), was signed into law on December 22, 2017. The U.S. Tax Reform significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. In assessing the realizability 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 is dependent upon the generation of future taxable income during the periods in which those differences become deductible or tax loss carry forwards are utilized. Management considers projected future taxable income and tax planning strategies in making this assessment. Based upon an assessment of the level of historical taxable income and projections for future taxable income over the periods on which the deferred tax assets are deductible or can be utilized, management believes it is not likely for the Company to realize all benefits of the deferred tax assets as of December 31, 2019 and December 31, 2018. Therefore, the Company provided for a valuation allowance against its deferred tax assets of $30,738,262 and $26,990,951 as of December 31, 2019 and 2018, respectively. The Company also incurred various other taxes, comprised primarily of business taxes, value-added taxes, urban construction taxes, education surcharges and others. Any unpaid amounts are reflected on the balance sheets as accrued taxes payable.

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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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