10. Income taxes

9 Months Ended

Sep. 30, 2011

Income Tax Disclosure [Text Block]

10. Income taxes

We recorded an income tax provision for the third quarter of 2011 of $276,000 at an effective tax rate of 24.8%, compared to an income tax provision during the third quarter of 2010 of $544,000 at an effective tax rate of 34.1%. For the nine months ended September 30, 2011, we recorded an income tax provision of $2,035,000 at an effective tax rate of 33.1%, compared to an income tax provision during the nine months ended September 30, 2010 of $1,566,000 at an effective tax rate of 35.7%. Our effective tax rate for the third quarter of 2011 was lower than the prior year rate due to the favorable impact of recognition of $53,000 of certain discrete tax benefits.

We are subject to U.S. federal income tax as well as income tax of certain state and foreign jurisdictions.  We have substantially concluded all U.S. federal income tax, state and local, and foreign tax matters through 2003.  During 2008, a limited scope examination of our 2005 and 2006 federal tax returns was completed.  However, our federal tax returns for the years 2004 through 2010 remain open to examination.  Various state and foreign tax jurisdiction tax years remain open to examination as well, though we believe that any additional assessment would be immaterial to the consolidated financial statements.  No federal, state or foreign tax jurisdiction income tax returns are currently under examination.

As of September 30, 2011, we had $187,000 of total gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods.  Within the next twelve months, we expect the total amount of unrecognized tax benefits to increase due to the recognition of certain credits.