Note 8 – Income taxes:

The components of the Company’s consolidated provision for income taxes are as follows:

	2016			2015
Federal – current	$	982,298		$	136,479
Federal – deferred		(25,565	)		101,290
State – current		27,163			1,842
State – deferred		(745	)		3,065
Total provision for income taxes	$	983,151		$	242,676

The reconciliation of the provision for income taxes at the statutory rate to the reported provision for income taxes is as follows:

	2016			%			2015			%
Income Tax computed at statutory rate	$	1,046,629			34.0	%	$	239,146			34.0	%
State tax, net of federal benefit		17,916			0.6	%		889			0.1	%
Share based compensation		(2,013	)		(0.1	)%		(2,881	)		(0.4	)%
Domestic production activities deduction		(97,645	)		(3.2	)%		(13,905	)		(1.9	)
Other, permanent adjustments		23,991			0.8	%		19,984			2.8	%
Tax credits and prior year tax adj.		(5,727	)		(0.2	)%		(557	)		(0.1	)%
Provision for income taxes	$	983,151			31.9	%	$	242,676			34.5	%

The Company’s deferred tax (liability) consisted of the following at December 31, 2016 and 2015:

	2016			2015
Deferred tax Asset (liability)
Inventory reserves	$	93,829		$	97,931
Trade accounts receivable allowances		26,259			27,404
Net Operating loss carryforward state		303,784			361,488
Depreciation of property and equipment		(333,455	)		(365,012	)
Net deferred tax asset		90,417			121,811
Valuation allowance		(303,784	)		(361,488	)
Total net deferred tax (liability)	$	(213,367	)	$	(239,677	)

At December 31, 2016 and 2015, the Company has a net operating loss carryforward with the state of Alabama. The net operating losses of $4,676,600 and $5,561,354 expire between 2020 and 2023. The Company does not expect to be able to utilize these losses and has recorded a valuation allowance for the full amount of the net operating losses.