Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Provision for Income Taxes

The provision for income taxes consists of the following:

	Year Ended December 31,
	2012		2011		2010
Current income taxes:
Federal	$	14,891,245	$	12,655,924	$	9,429,658
State		1,211,358		2,086,588		1,782,984
Total		16,102,603		14,742,512		11,212,642
Deferred income taxes:
Federal		691,961		449,566		(436,528	)
State		42,247		338,692		249,396
Total		734,208		788,258		(187,132	)
Total income tax provision	$	16,836,811	$	15,530,770	$	11,025,510

Deferred Income Tax Assets and Liabilities

Significant components of the Company's deferred tax assets and liabilities were as follows at December 31:

	2012			2011
Deferred tax assets:
Amortization of software intangibles	$	1,493,102		$	2,494,223
Stock-based compensation		1,270,998			1,410,975
State net operating loss carryforwards		401,591			483,794
Amortization of internal use software development costs		1,231,729			1,055,733
Accrued vacation		576,187			690,095
Deferred rent		274,857			310,633
Allowance for doubtful accounts		236,494			206,452
Other		194,556			152,366
		5,679,514			6,804,271
Less: Valuation allowance		(291,249	)		(422,564	)
Total		5,388,265			6,381,707
Deferred tax liabilities:
Depreciation & capitalized internal use software and development costs		(5,410,640	)		(4,113,178	)
Nonrecurring gain on acquisition of business		(1,140,886	)		(1,186,207	)
Other		-			(83,285	)
Total		(6,551,526	)		(5,382,670	)
Net deferred tax asset (liability)	$	(1,163,261	)	$	999,037

Statutory Federal Income Tax Rate and Effective Income Tax Rate Reconciliation

The following table reconciles the statutory federal income tax rate and the effective income tax rate indicated by the consolidated statements of income:

	Year Ended December 31,
	2012			2011			2010
Statutory federal income tax rate		35.0	%		35.0	%		35.0	%
State income taxes		1.0			4.4			4.3
Uncertain tax positions		0.3			0.4			(0.3	)
Federal and state tax credits		-			(1.7	)		(3.1	)
Nondeductible expenses		2.5			2.0			1.4
Other		0.2			0.3			0.2
Effective federal and state income tax rate		39.0	%		40.4	%		37.5	%

Reconciliation of Unrecognized Income Tax Benefits

The following table provides a reconciliation of the beginning and ending amount of the consolidated liability for unrecognized income tax benefits (included in other long-term liabilities in the consolidated balance sheets) for the years ended December 31, 2012, 2011 and 2010:

	2012			2011			2010
Balance at January 1	$	586,606		$	397,825		$	498,845
Additions for tax positions of prior years		262,865			247,429			185,507
Reductions for tax positions of prior years		(347,492	)		-			(153,844	)
Additions for tax positions of current years		186,596			-			-
Settlements		-			(48,218	)		-
Expiration of the statute of limitations		-			(10,430	)		(132,683	)
Balance at December 31	$	688,575		$	586,606		$	397,825