NOTE 5 — INCOME TAXES:

The Company’s provision for income tax expense (benefit) for fiscal 2017 and fiscal 2016 was as follows:

	2017			2016
	(In thousands)
Current:
Federal	$	(596	)	$	(685	)
Foreign, state and other		5			8
Prior year federal and state, with interest		154			48
Uncertain tax positions, federal and state		—			(249	)
Deferred:
Federal		540			602
Foreign, state and other		69			17
Provision for income tax expense (benefit)	$	172		$	(259	)

The Company files a consolidated federal return and certain state and local income tax returns.

The difference between the effective rate reflected in the provision for income taxes and the amounts determined by applying the statutory federal rate of 34% to earnings before income taxes for fiscal March 2017 and fiscal 2016 is analyzed below:

	2017			2016
	(In thousands)
Statutory provision	$	(40	)	$	(432	)
Foreign subsidiary		(71	)		76
State taxes		(51	)		48
Permanent differences		112			3
True up to prior year taxes		(63	)		299
Valuation allowance		288			—
(Decrease)/increase in Uncertain Tax Positions		—			(249	)
NOL Adjustments		(3	)		(4	)
Provision for income tax (benefit) expense	$	172		$	(259	)

As of March 31, 2017 and March 31, 2016, the significant components of the Company’s deferred tax assets which were classified as non-current, were as follows:

	2017			2016
	(In thousands)
Deferred tax assets:
Accounts receivable reserves	$	123		$	548
Inventory reserves		201			284
Accruals		17			42
Property, plant and equipment and intangible assets		438			504
Net operating loss and credit carry forwards		300			23
Valuation allowance		(288	)		—
Total deferred tax assets	$	791		$	1,401

The Company has U.S. federal net operating loss carry forwards (“NOLs”) of $0.3 million as of March 31, 2017.

The Company has $3.0 million of state NOLs as of March 31, 2017 as follows (in millions $):

Loss Year (Fiscal)	Included in DTA	Expiration Year (Fiscal)
2014	$2.4 million		2034
2016	$0.5 million	2036

The tax benefits related to these state net operating loss carry forwards and future deductible temporary differences are recorded to the extent management believes it is more likely than not that such benefits will be realized.

The loss of foreign subsidiaries before taxes was $220,000 for the fiscal year ended March 31, 2017 as compared to a loss before taxes of $212,000 for the fiscal year ended March 31, 2016, respectively.

No provision was made for U.S. or additional foreign taxes on undistributed earnings of foreign subsidiaries. Such earnings have been and will be reinvested but could become subject to additional tax if they were remitted as dividends, or were loaned to the Company or a domestic affiliate, or if the Company should sell its stock in the foreign subsidiaries. It is not practicable to determine the amount of additional tax, if any, that might be payable on undistributed foreign earnings.

The Company analyzed the future reasonability of recognizing its deferred tax assets at March 31, 2017. As a result, the Company concluded that a valuation allowance of approximately $288,000 would be recorded against the assets.

The Company is subject to examination and assessment by tax authorities in numerous jurisdictions. As of March 31, 2017, the Company’s open tax years for examination for U.S. federal tax are 2013-2016, and for U.S. states’ tax are 2011-2015. Based on the outcome of tax examinations or due to the expiration of statutes of limitations, it is reasonably possible that the unrecognized tax benefits related to uncertain tax positions taken in previously filed returns may be different from the liabilities that have been recorded for these unrecognized tax benefits. As a result, the Company may be subject to additional tax expense.