Note 4 - Income Taxes

3 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

4. Income Taxes

The following table presents the components of our income tax expense for the following periods (dollars in thousands): 

	Three Months Ended March 31,
	2014			2013
Current:
Federal	$	-		$	5
State and local		28			29
Total Current		28			34
Deferred:
Federal	$	-		$	-
State and local		-			-
Total Deferred		-			-
Income tax expense	$	28		$	34
Effective income tax rate		-22.4	%		2.8	%

Our effective tax rate for the three months ended March 31, 2014 is impacted by a full valuation allowance against all of our deferred tax assets, net of deferred tax liabilities.

As of March 31, 2014 and December 31, 2013, the net deferred tax assets were offset by full valuation allowances because it was not more-likely-than-not that we will realize our deferred tax assets. We did not record the related tax benefits in the United States and state jurisdictions during the three months ended March 31, 2014. Income tax expense for the three months ended March 31, 2014 and 2013 includes interest on unrecognized tax benefits and state taxes in certain jurisdictions.

During the three months ended March 31, 2014, there were no significant changes to the liability for unrecognized tax benefits. All interest and penalties related to unrecognized tax benefits are recorded as a component of income tax expense. The total amount of unrecognized tax benefits at both March 31, 2014 and December 31, 2013 was $304,000. It is reasonably possible that the amount of the total unrecognized tax benefits may change in the next 12 months. However, we do not believe that any anticipated change will be material to the Condensed Consolidated Financial Statements.

We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and Canada. We are subject to audit by taxing authorities for fiscal years ending after 2010. Our federal and state income tax return filings generally are subject to a three-year statute of limitations from date of filing. In the fourth quarter of 2013, the Internal Revenue Service initiated an examination of the tax year 2011. We cannot predict the timing of the conclusion of the audit. Based on the early status of the audit and protocol of finalizing audits by the relevant tax authorities, we cannot estimate the impact of such changes, if any, to previously recorded unrecognized tax benefits.