Note N - Provision for Taxes

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note N – Provision for Taxes

The effective tax rate for the three months ending September 30, 2024 was 23.9% compared to 16.6% for the same three month period last year. The effective tax rate for the nine months ending September 30, 2024 was 23.9% compared to 19.0% for the same period last year. The increase in the effective tax rate for 2024 is primarily due to the recognition of gain on the sale of stock in Harvard Sports, Inc., a wholly owned subsidiary of Escalade, Inc., which was completed during the three months ended September 30, 2024. Another factor causing an increase in rate from the prior year is the dissolution of the Company’s captive insurance company. In prior years, the premiums paid to the captive were included in book income, but were non-taxable, resulting in a decrease in tax rate. With the dissolution of the captive in 2023, Escalade no longer has this non-taxable income to reduce its income tax rate.