10.

Income Taxes

The income tax provisions are comprised of the following:

	Dec. 31 2013		Dec. 31 2012
Current:
Federal	$	-	$	-
State		43,751		-
Foreign		92,643		471,112
	$	136,394	$	471,112

Deferred
Federal	$	(62,192)	$	(112,978)
State		-		-
Foreign		195,634		(311,862)
		133,442		(424,840)
Total Income Tax Provision	$	269,836	$	46,272

The components of the net deferred tax asset at December 31 are as follows:

	2013		2012
Deferred tax assets:
Allowance for doubtful accounts	$	54,352	$	20,534
Inventory allowances		283,193		255,285
Accrued liabilities		200,395		73,929
Unicap 263A adjustment		186,611		151,625
Net operating loss carryforwards		690,846		602,580
Alternative minimum tax credit carryforwards		398,162		348,867
State investment tax credit carryforward		76,668		34,523
Foreign tax credit carryforward		615,080		615,080
Other foreign tax items		-		600,844
Foreign net operating loss carryforwards		461,965		-
Total deferred tax assets		2,967,272		2,703,267
Deferred tax liabilities:
Tax over book basis of capital assets		(1,354,409)		(1,113,335)
Undistributed Earnings from Subsidiaries		(211,274)		-
Other foreign tax items		(152,705)		(207,607)
Net deferred tax assets	$	1,248,884	$	1,382,325

The Company has net operating loss carryforwards of approximately $2,668,000 expiring in various years through 2025. In addition, the Company has approximately $398,000 of alternative minimum tax credits as of December 31, 2013, which have no expiration date.

Income tax provisions differed from the taxes calculated at the statutory federal tax rate as follows:

	Years Ended December 31,
	2013		2012
Taxes at statutory rate	$	230,474	$	32,411
State income taxes		42,502		5,718
Nondeductible expenses		40,565		57,937
Foreign taxes and other		(43,705)		(49,794)
Income tax provision	$	269,836	$	46,272

The Company files tax returns in the U.S., and in the U.K, Germany and Mexico foreign tax jurisdictions and also in various state jurisdictions in the U.S. The tax years 2010 through 2013 remain open to examination. Our policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. During the twelve months ended December 31, 2013 and 2012, the Company did not recognize expense for interest or penalties, and do not have any amounts accrued at December 31, 2013 and 2012, as the Company does not believe it has taken any uncertain tax positions.