Note 5 - Income Taxes

3 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

5. Income Taxes

During the

three

-month period ended

June 30, 2018,

the Company recorded

$387,000

in income tax expense at an effective rate of 

10.5%.

The Company records income taxes using an estimated annual effective tax rate for interim reporting. The primary factors contributing to the difference between the federal statutory rate of

21%

and the Company’s effective tax rate for the

three

-month period ended

June 30, 2018

were the estimated benefit for the exclusion of income for the Company’s captive insurance company subsidiary under Section

831

(b), the presentation of the tax impact of the bargain purchase gain and state income tax expense. During the

three

-month period ended

June 30, 2017,

the Company recorded

$374,000

in income tax expense which resulted in an effective tax rate of

23.3%.

The primary factors contributing to the difference between the federal statutory rate and the Company’s effective tax rate for the

three

-month period ended

June 30, 2017

were the change in valuation allowance against Delphax’s pretax activity in the period, the benefit for the federal domestic production activities deduction, the increase in the valuation allowance related to the Insignia unrealized impairment loss, state income tax expense, and the estimated benefit for the exclusion of income for the Company’s captive insurance company subsidiary afforded under Section

831

(b).