Note 8 - Income Taxes

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

8

. Income Taxes

During

the

three

month periods ended

September 30, 2017

and

2016,

net income attributable to Avalon Holdings Corporation shareholders was

$0.5

million and

$0.8

million, respectively. During the

nine

month period ended

September 30, 2017,

net loss attributable to Avalon Holdings Corporation shareholders was

$0.3

million compared with net income attributable to Avalon Holdings Corporation shareholders of

$0.3

million during the

nine

month period ended

September 30, 2016.

Avalon recorded a state income tax provision in both the

three

and

nine

month periods ended

September 30, 2017

and

2016,

which was related entirely to the waste management and brokerage operations. The effective state tax rate related to the waste management and brokerage operations was approximately

7

%

in both the

three

and

nine

month periods ended

September 30, 2017

and

2016.

Due to the recording of a full valuation allowance against the Company’s federal net deferred tax assets, the overall effective tax rate in both periods reflects taxes owed in certain U.S state jurisdictions. 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.