Annual report [Section 13 and 15(d), not S-K Item 405]

Note 7 - Income Taxes

v3.25.0.1
Note 7 - Income Taxes
 12 Months Ended
Dec. 31, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

7.  Income Taxes

 ​

Deferred tax attributes resulting from differences between the tax basis of assets and liabilities and the reported amounts in the Consolidated Balance Sheets are as follows:

 

​

  

December 31,

    

December 31,

  

​

  

2024

    

2023

  

Deferred tax assets:

  

​

    

​

  

Accruals and reserves

   $ 1,563     $ 574  

Deferred rent credit

     92       115  

Depreciation and amortization

     635       55  

Total deferred tax assets

     2,290       744  

Deferred tax liabilities:

  

​

    

​

  

Accruals and reserves

     (965 )     —  

Depreciation and amortization

     (5,855 )     (5,974 )

Total deferred tax liabilities

     (6,820 )     (5,974 )

Net deferred tax liabilities

   $ (4,530 )   $ (5,230 )

 

The provision for income taxes is as follows:

 

​

  

Year ended December 31,

  

​

  

2024

    

2023

  

Current:

  

​

    

​

  

Federal

   $ 4,610     $ 2,793  

State

     839       676  

Foreign

     1,471       1,372  

​

     6,920       4,841  

Deferred:

  

​

    

​

  

Federal

     28       32  

State

     112       10  

Foreign

     (652 )     (425 )

​

     (512 )     (383 )

​

   $ 6,408     $ 4,458  

Effective Tax Rate

     25.6 %     26.6 %

 

The reasons for the difference between total tax expense and the amount computed by applying the U.S. statutory federal income tax rate to income before income taxes are as follows:

 

​

  

Year ended December 31,

  

​

  

2024

    

2023

  

Statutory rate applied to pretax income

   $ 5,254     $ 3,524  

Other permanent items

     384       569  

State income taxes, net of federal income tax benefit

     752       542  

Acquisition related costs

     760       132  

Other items

     56       —  

Dividends

     (1 )     (3 )

GILTI, net of foreign tax credits

     (41 )     (11 )

Foreign income taxes (under) U.S. statutory rate

     (200 )     (46 )

Stock compensation

     (556 )     (249 )

Income tax expense

   $ 6,408     $ 4,458  

 

The Company has analyzed filing positions in all the federal, state and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has identified its federal consolidated tax return, its state tax returns, its Canadian tax return and its tax return in the United Kingdom as major tax jurisdictions. As of December 31, 2024, the Company’s 2021 through 2023 Federal tax returns remain open for examination. The Company’s various states and Canadian tax returns are open for examination for the years 2020 through 2023. The Company’s tax return in the United Kingdom is open for examination for the years 2022 and 2023. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company believes that it has appropriate support for the income tax positions it takes and expects to take on its tax returns, and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including experience and interpretations of tax law applied to the facts of each matter.

 

For financial reporting purposes, income before income taxes includes the following components:

 

​

  

Year ended December 31,

  

​

  

2024

    

2023

  

United States

   $ 20,961     $ 11,990  

Foreign

     4,057       4,791  

​

   $ 25,018     $ 16,781  

 

The Company has approximately $10.2 million of undistributed earnings in Canada and $4.9 million of undistributed earnings in the United Kingdom and $0.6 million of undistributed earnings in Ireland, which it continues to reinvest indefinitely, and therefore no withholding taxes related to its repatriation has been recorded.

 ​

There was no activity related to the Company’s unrecognized tax benefits during the year ended December 31, 2024 and December 31, 2023.

 ​

During the years ended December 31, 2024 and 2023, the Company incurred interest and penalties of zero, respectively, related to these uncertain tax benefits.