Note 8 - Income Taxes

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

8

. Income Taxes

During the

three

month periods ended

June 30, 2017

and

2016,

net income attributable to Avalon Holdings Corporation shareholders was

$0.1

million and

$0.4

million, respectively. During the

six

month periods ended

June 30, 2017

and

2016,

net loss attributable to Avalon Holdings Corporation shareholders was

$0.8

million and

$0.5

million, respectively. Avalon recorded a state income tax provision in both the

three

and

six

month periods ended

June 30, 2017

and

2016,

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 both the

three

and

six

month periods ended

June 30, 2017

and

2016.

The overall effective tax rate is different than statutory rates primarily due to a change in the valuation allowance. Avalon’s income tax on the income (loss) before taxes was offset by a change 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.