Note 6 - Income Taxes

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

6.

  Income Taxes

Generally, the Company’s combined effective tax rate is high relative to reported net income as a result of certain amortization expense, stock based compensation, and corporate overhead

not

being deductible and income being attributable to certain states in which it operates. In recent years, the majority of taxes being paid by the Company were state taxes,

not

federal taxes. The Company operates in

four

states which have relatively high tax rates: California, New York, Illinois, and Florida. As of

September 30, 2018,

the Company had federal income tax loss carryforwards of

$1.5

million.

The U.S. Tax Cuts and Jobs Act enacted on

December 22, 2017

introduced significant changes to U.S. income tax law. Effective in

2018,

the Tax Act reduces the U.S. statutory tax rate from

35%

to

21%

and creates new taxes on certain foreign-sourced earnings and certain related-party payments, which are referred to as the global intangible low-taxed income tax and base erosion tax, respectively.