Note 13 - Income Taxes

12 Months Ended

Mar. 31, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

13. INCOME TAXES

The components of income tax expense were as follows: 

	Year Ended March 31,
	2015			2014
Current:
Federal	$	1,209,000		$	36,000
State		159,000			176,000
Foreign		(65,000	)		69,000
Total current		1,303,000			281,000
Deferred:
Federal		(315,000	)		779,000
State		(57,000	)		132,000
Total deferred		(372,000	)		911,000
Total	$	931,000		$	1,192,000

Income tax expense was different from the amount computed by applying the statutory Federal income tax rate of 34% as shown in the following table:

	Year Ended March 31,
	2015					2014
Expected federal income tax expense U.S. statutory rate	$	1,161,000		34.0	%	$	904,000	34.0	%
State income taxes, net of Federal benefit		67,000		2.0			203,000	7.6
Permanent differences, other		42,000		1.2			15,000	0.6
Section 831(b) benefit		(364,000	)	(10.6	)		-	-
Other differences, net		(25,000	)	0.7			70,000	2.6
Income tax expense	$	931,000		27.3	%	$	1,192,000	44.8	%

Deferred tax assets and liabilities consisted of the following as of:

	March 31,
	2015			2014
Inventory reserves	$	115,000		$	279,000
Accrued vacation		244,000			237,000
Stock option compensation		47,000			150,000
Warranty reserve		85,000			88,000
Accounts and notes receivable reserve		83,000			57,000
Net operating loss carryforwards		-			91,000
Federal credits		-			69,000
263A Inventory Capitalization		145,000			11,000
Other		79,000			6,000
Total deferred tax assets		798,000			988,000
Prepaid expenses		(473,000	)		(616,000	)
Property and equipment		(463,000	)		(1,004,000	)
Total deferred tax liabilities		(936,000	)		(1,620,000	)
Net deferred tax (liability) asset	$	(138,000	)	$	(632,000	)

The deferred tax items are reported on a net current and non-current basis in the accompanying fiscal 2015 and 2014 consolidated balance sheets according to the classification of the related asset and liability.

The Company accounts for uncertain tax positions in accordance with accounting principles generally accepted in the United States of America. The Company has analyzed filing positions in all of the federal, state and international jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The periods subject to examination for the Company’s federal return are the fiscal 2012 through 2013 tax years. The periods subject to examination for the Company’s state returns are the fiscal 2010 through 2013 tax years. As of March 31, 2015 and 2014, the Company did not have any unrecognized tax benefits. The Company does not believe there will be any material changes in unrecognized tax positions over the next twelve months.

It is the Company’s policy to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of March 31, 2015 and 2014, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the years ended March 31, 2015 and 2014.