8. INCOME TAXES (Tables)

12 Months Ended

Aug. 31, 2019

Income Tax Disclosure [Abstract]

Components of the income tax provision

	2019			2018			2017
Current
Federal	$	1,794,596		$	2,370,955		$	2,385,660
State		426,364			460,619			217,281
Foreign		51,285			104,377			28,103
		2,272,245			2,935,951			2,631,044
Deferred
Federal		(140,730	)		(1,698,201	)		(612,629
State		(158,368	)		(33,620			434,255
		(299,098	)		(1,731,821	)		(178,374	)
Total	$	1,973,147		$	1,204,130		$	2,452,670

Effective income tax rate

	2019		2018		2017
Income tax computed at federal statutory tax rate		21.0%		25.4%		34.0%
State taxes, net of federal benefit		4.1		4.0		3.5
Meals & entertainment		0.1		0.0		0.0
Stock based compensation		(2.6)		0.5		0.0
Other permanent differences		(0.7)		1.2		(0.5)
Research and development credit		(2.3)		(2.6)		(3.6)
Domestic production activities		–		(1.8)		(2.3)
Change in deferred income taxes due to statutory rate changes		–		(14.8)		–
Change in prior year estimated taxes		(0.9)		(0.0)		(1.3)
Total		18.7%		11.9%		29.8%

Components of the Company deferred tax assets and liabilities

	2019			2018
Deferred tax assets
Accrued payroll and other expenses	$	236,455		$	187,220
Deferred revenue		55,038			34,955
Capitalized merger costs		361,103			365,801
Intellectual property		9,301			11,066
State taxes		89,537			96,730
State tax deferred		146,815			174,800
Total deferred tax assets		898,249			870,572
Less: Valuation allowance		–			–
		898,249			870,572
Deferred tax liabilities
Property and equipment		(61,991	)		(57,636	)
State tax deferred		(16,471	)		(10,701	)
Intellectual property		(2,217,234	)		(2,593,292	)
Capitalized computer software development costs		(1,334,169	)		(1,404,082	)
Total deferred tax liabilities		(3,629,865	)		(4,065,711	)
Net deferred tax liabilities	$	(2,731,616	)	$	(3,195,139	)