Note 6 - Income Taxes

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 6. Income Taxes

Avalon recorded a net loss of $5,000 and $88,000 in the second quarter of 2015 and 2014, respectively. During the six month periods ended June 30, 2015 and 2014, Avalon recorded a net loss of $1,045,000 and $787,000, respectively. Avalon recorded a state income tax provision in both the three and six month periods ended June 30, 2015 and 2014, which was related entirely to the waste management and brokerage operations. Excluding the effect of this state tax provision, Avalon’s overall effective tax rate was 0% in the three and six month periods ended June 30, 2015 and 2014. The overall effective tax rate is different than statutory rates primarily due to a change in the valuation allowance. Avalon’s income tax benefit on the loss before taxes was offset by an increase in the valuation allowance. A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized. Avalon continues to maintain a valuation allowance against the majority of its deferred tax amounts until it is evident that the deferred tax asset will be utilized in the future.