Note 3 - Income Taxes
|12 Months Ended|
Sep. 30, 2012
|Income Tax Disclosure [Text Block]||
3. INCOME TAXES
The provision for income taxes consists of the following:
The difference between the statutory federal income tax rate and the Company’s effective rate is summarized below:
At September 30, 2012, the Company’s deferred income tax liabilities were comprised of the following:
Based on the Company’s assessment of the future realizability of its deferred assets, including the consideration of historical levels of income, expectations and risks associated with estimates of future taxable income, no valuation allowance was recorded as of September 30, 2012 and 2011.
On a pretax profit of $7,901,000 and $12,000,000 for the twelve months ended September 30, 2012 and 2011, respectively, the Company recorded a tax provision of $2,360,000 and $4,160,000 respectively, which was lower in each case than the amount computed using the statutory rate because of (i) the available dividends received deduction and the domestic production activity deduction, and (ii) the reversal of an uncertain tax liability as the Company reached an agreement with the Internal Revenue Service in March 2012 to settle the Company’s previously claimed research and development credits in its tax returns for the years 2002 to 2007. As a result, the Company’s previously recorded provision for this matter of approximately $700,000 was reduced by $282,000. Consequently, the Company’s effective tax rate was about 30% and 35% for fiscal 2012 and 2011, respectively. The Company files federal income tax returns in the United States and with various state jurisdictions, and it is no longer subject to examinations for the years before 2010 with regard to federal income taxes.
At September 30, 2012, there was no unrecognized tax liability for the uncertain tax positions. A reconciliation of the beginning and ending balance for liabilities associated with unrecognized tax liabilities is as follow:
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.
Reference 1: http://www.xbrl.org/2003/role/presentationRef