NOTE 5

INCOME TAXES

The income tax positions taken for open years are appropriately stated and supported for all open years. The Company’s federal tax returns for the fiscal years ended 2013, 2014, and 2015 are subject to examination by the IRS taxing authority.

The sources of deferred income tax assets and liability at June 30, 2016 and 2015 are as follows:

	2016			2015
Deferred Income Tax Assets:
Inventories	$	1,223		$	1,075
Trade Receivables		6,310			6,213
Deferred Income		4,332			4,828
Total Deferred Income Tax Assets		11,865			12,116

Deferred Income Tax Liability:
Property and Equipment		(94,778	)		(103,694	)
NET DEFERRED INCOME TAX LIABILITY	$	(82,913	)	$	(91,578	)

The net deferred income tax asset (liability) is presented in the accompanying June 30, 2016 and 2015 consolidated balance sheets as follows:

	2016			2015
Current Deferred Income Tax Asset	$	7,533		$	7,288
Noncurrent Deferred Income Tax Liability		(90,446	)		(98,866	)
NET DEFERRED INCOME TAX LIABILITY	$	(82,913	)	$	(91,578	)

The provision (credit) for income taxes for the years ended June 30, 2016 and 2015 consists of the following:

	2016			2015
Current Income Tax Expense	$	11,138		$	41,400
Deferred Income Tax Expense (Credit)		(8,665	)		19,449
	$	2,473		$	60,849

The income tax provision differs from the amount of income tax determined by applying the statutory federal income tax rate to pretax income for the years ended June 30, 2016 and 2015 due to the following:

	2016			2015
Computed at Federal Statutory Rate of 34%	$	12,309		$	68,623
Increase (Decrease) in Income Taxes Resulting from:
Federal Tax Adjustment Due to Actual Rate vs. Statutory Rate		(9,730	)		(10,129	)
Non-Deductible Expenses		630			640
Domestic Production Activities Deduction Credit		(1,767	)		(4,453	)
Other		(27	)		132
State Income Taxes		1,058			6,036
	$	2,473		$	60,849